The Biggest Shareholder of UJB Prods Bank to Consider Merger

The largest shareholder of UJB Financial Corp. has urged the company's board to consider a merger, according to a filing with the Securities and Exchange Commission.

Chilmark Capital Corp. made the request after learning that UJB had received serious overtures from at least one of two neighboring banks, according to a source familiar with the situation.

He and others said both CoreStates Financial Corp., based in Philadelphia, and First Fidelity Bancorp of Lawrenceville, N.J., are interested in UJB, New Jersey's third-largest bank company.

UJB chairman T. Joseph Semrod rebuffed at least one of the banks that approached him, the source said.

No Comment from Banks

Spokesmen for Chilmark, UJB, CoreStates, and First Fidelity would not comment.

Chilmark, run by partners Neil J. Weisman and Robert Cohen, owns 9.9% of Princeton, N.J.-based UJB. Chilmark bought the bulk of its shares in May 1991.

Philadelphia's CoreStates, with $22.8 billion in assets, and First Fidelity, based in Lawrenceville, N.J., and with $28.9 billion in assets, have both expressed interest in expansion.

While UJB, with $13 billion in assets, has suffered from souring real estate loans along with other New Jersey banks in the past two years, some believe it is on the mend and that it has a good franchise.

The source said that one of the banks has had discussions with Chilmark in the past six weeks about a possible UJB acquisition and that the other bank has indicated its interest in acquiring UJB to the firm through a third party.

The source said it was unclear if either bank had done any formal due diligence on UJB.

Many banking experts have maintained since the summer that the Middle Atlantic region, notably New Jersey, will be the next hotbed for mergers. The region has suffered from the real estate depression, but experts believe that because it has a growing, well-to-do population, it is an attractive market.

UJB stock closed at $14.875 Thursday, up 62.5 cents.

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