MEMPHIS -- Tennessee's four major banking companies have been bypassed so far as acquisition targets, but that could change as the industry continues to consolidate, analysts said.

On Wednesday, for example, Union Planters Corp. was swept up in takeover speculation, and its shares rose $1.625 a share, to close at $26.50.

Although the stock slipped back by 75 cents a share Thursday to $25.75, analysts said the Memphis-based banking company could be an attractive target for a number of superregionals, including Wachovia Corp., First Union Corp., Banc One Corp., and NationsBank.

Jackson W. Moore, Union Planters' president, didn't return a phone call for comment.

In addition to Union Planters, Tennessee's three other major bank holding companies are First Tennessee National Corp., First American Corp., and National Commerce Bancorp.

Tempting Size and Location

Though all four are viewed as potential acquisition candidates, Union Planters is seen by some as the most likely target, in part because of its size and Memphis location.

In terms of size, Union Planters and First American share the middle ground among the four banks, with assets of $6.1 billion and $6.8 billion, respectively.

With nearly $9.5 billion in assets. First Tennessee may be too large for a buyer to digest easily.

National Commerce, with assets of $2.5 billion, is the smallest of the four banks, but the banking company's stock already trades at a lofty 2.7 times book value. .

"It's a great company," said Peter Tuz at Morgan Keegan in Memphis.

But the market has already rewarded it with a big premium to its peers.

Union Planters and First American are both perhaps the optimum size for a takeover target. But Union Planters' Memphis base could make it more attractive than First American, which is based in Nashville.

That's because Memphis has become one of the "target cities" among potential buyers, said Scott Edgar, portfolio analyst at SIFE Trust Fund, Walnut Creek, Calif. The fund is about 90% invested in bank stocks.

Analysts didn't rule out an instate combination of two of the four Tennessee banks, but they said an acquisition by an out-of-state bank was more likely.

Mr. Edgar said Union Planters probably could fetch up to $31 or $32 a share, or roughly 1.75 times its book value of about $18 a share.

$36 a Share

A price of two times book value, or about $36 a share, is "not out of the question," but anything above that gets "pretty expensive," he added.

Despite the takeover speculation that drove up Union Planters' stock price earlier this week, Mr. Tuz said he does not think an acquisition is imminent.

"I think anybody would be in error to expect it to be a quick takeover play at this point," he said.Possible Takeover Targets Price to Market Assets (Sept. 30) earnings(*) to book(*)First Tennessee $9.5 billion 10.5 1.6First American 6.8 billion 9.2 1.5Union Planters 6.1 billion 10.0 1.4National Commerce 2.5 billion 15.7 2.7(*)Based on Oct. 27 closing pricesSources: SNL Securities, Keefe, Bruyette & Woods

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