The merger mania that struck last year in New Jersey could soon be repeated in Missouri, some analysts believe.

Missouri banks, long seen as takeover fodder, are trading in the stock market at a discount to their potential acquirers, making them easier prey, the analysts say.

"Valuation of any company's common stock is the key determinant in M&A," said Joseph Stieven, a bank analyst with Stifel Nicolaus & Co. in St. Louis. "If banks stock trade at a discount, it makes those companies more susceptible to being on the selling side than the buying side."

This valuation disparity is coupled with megabanks' need to gain a presence Missouri if they have nationwide aspirations.

"Our discussions with expansion-minded banks indicate the interest is high among out-of-state superregional banks with franchises bordering the (Missouri) market," said Jeffrey Naschek, a bank analyst with Salomon Brothers.

"Furthermore, once the first deal is consummated, we believe that scarcity value will prompt quick responses from other acquirers seeking to avoid missed opportunity," he added.

This scenario unfolded in New Jersey last year, when roughly 80% of the state's deposits changed hands. After First Union Corp. agreed to buy First Fidelity Bancorp. in June, several major mergers quickly followed.

In Missouri, because of relatively weak earnings and business ratios, many of the banks trade at a discount to their peers, said Mr. Naschek.

Boatmen's Bancshares, the state's largest bank, trades at 183% of book, 13 basis points lower than other superregionals Salomon tracks, he said. And Magna Group Inc. trades at a slim 145% of book value.

Missouri banks' price-to-earnings ratios are in line with those of other banks, but any Missouri deal probably would be predicated on synergies that would enhance earnings, Mr. Naschek said.

The banks most frequently mentioned as acquirers are Banc One Corp., NationsBank Corp., Norwest Corp., and First Bank System Inc., Mr. Stieven said.

Last year, one of the state's few expensively priced banks, Mark Twain Bancshares, was on the verge of being sold, observers say. But the deal fell through at the last minute.

Analysts pegged the failure on the state's deposit cap, which prevents an institution from buying more than 13% of the deposits in Missouri.

Had First Bank System bought Mark Twain, as was rumored, the Minneapolis bank would have been prevented from buying any of the state's top three banks: Boatmen's, Mercantile Bancorp, and Magna.

Last week, an effort in the state legislature to raise the cap failed, so this hurdle could be around for a while and dissuade some buyers, Mr. Stieven said.

Many of the banks tend to favor independence, he continued, and are helped by external factors like the regulatory cap.

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