Trading of Standard Federal Bank shares was halted Thursday amid rumors the Troy, Mich., thrift was in merger talks with the Dutch banking giant ABN Amro N.V.
At press time no announcement had been made.
The rumors that Standard Federal was in talks with Amro have been swirling for weeks, lifting the $15.4 billion-asset thrift's stock 6% since Sept. 28.
It was up $1.25 to $58 when trading was halted in midafternoon, after more than 141,000 shares had changed hands. Average daily volume for the stock is about 73,000 shares, but trading had been well above that level all week.
"The sense is that (Amro is) is looking at Standard Federal very hard right now," said Michael Moran, an analyst at Roney & Co., Detroit. Talk of a deal has "really picked up" over the past week, he added.
Analysts said Standard Federal could command 1.5 to 2 times its book value, indicating a deal price in the range of $1.3 billion to $1.8 billion. The thrift's share were at about two times book when trading was halted.
ABN Amro is said to be interested in Standard because of the thrift's new presence in Chicago through its recent purchase of Bell Bancorp. The Dutch bank, which already owns LaSalle National Corp. in Chicago, has said it aims to dominate the fragmented banking market there. Its latest acquisition was the purchase last summer of Comerica Inc.'s Illinois subsidiary, bringing its Chicago assets to $18 billion.
Also, Standard Federal's wholesale mortgage origination network is seen as a quick way for ABN Amro to get a national presence, according to Mr. Moran.
Further fueling takeover rumors is the pending retirement, scheduled for yearend, of Standard Federal's longtime chairman, Thomas R. Ricketts. He has yet to name a succession team.
Analysts have said all year that his leaving could open the way for new owners and new managers. Mr. Ricketts was in a board meeting Thursday and could not be reached for comment.
Thomas O'Donnell, a Smith Barney analyst, said Standard Federal is hardly the only thrift that has been the subject of merger rumors lately.
"Normally (the jump in volume) might indicate that people think something is going on," Mr. O'Donnell said. "But the takeover theme is becoming more pronounced in the thrift industry," and many other big thrifts have shown similar patterns.
For example, Great Western Bank, Chatsworth, has seen its stock jump 11.5% from Sept. 28 through the close Wednesday; H.F. Ahmanson's Home Savings of America, Irwindale, Calif., had gone up over 9%; and the biggest winner, Dime Bancorp, has gained almost 14%.
Published accounts have linked Dime with Republic New York Corp. and Greenpoint Financial Corp.
Strong business fundamentals, such as improving credit quality, as well as good news from Washington on several thorny regulatory issues is feeding takeover speculation, Mr. O'Donnell said.
As the largest thrift in the Midwest, Standard Federal is seen as a good catch for any number of banks who want to strengthen their hold in it's core Michigan market. Bank of America, NationsBank, and Norwest, for example, have often been cited as potential buyers.
