Union Planters Corp. made a strong bid to join the ranks of superregional banking companies with an agreement to buy Magna Group of St. Louis for $2.3 billion.

The all-stock transaction, expected to close in the third quarter, would be the largest ever by Memphis-based Union Planters and its 64th acquisition since 1992. Nine of those deals remain pending.

Magna's $7.1 billion of assets would bring Union Planters' total to $28.5 billion, a size and scope that it hopes will differentiate it from a pack of smaller companies vying for a higher profile in the region.

But Union Planters is no less vulnerable to being viewed as a target in its own right, an analyst said. The addition of Magna "easily enhances the attractiveness of Union Planters" for would-be buyers, said Joseph Stieven of Stifel, Nicolaus & Co.

The move puts Union Planters in the same size range as Regions Financial Corp., Birmingham, Ala., another aggressive acquirer, which moved this month to become a $32 billion-asset company with a deal for First Commercial Corp., Little Rock, Ark.

Union Planters, which had mainly been acquiring community banks and thrifts, has been looking to make a bigger deal for some time. It tried in vain for Deposit Guaranty Corp. of Jackson, Miss., and for First Commercial.

In moving to acquire Magna Group, which a person familiar with the Missouri company said was not formally up for auction, Union Planters expands in a state that has already seen considerable consolidation. But Union Planters can make more purchases in Missouri, while state regulatory limits discourage larger competitors such as NationsBank Corp. or Mercantile Bancorp from adding to their in-state market shares.

Last year Union Planters agreed to acquire three community banks in Missouri.

"Union Planters will try to assemble everything available in Missouri before they sell out, which they'll probably do in the next 18 months," said Barry P. Taff, a partner in the law firm Silver, Freedman & Taff, who advised Union Planters last year on its purchase of Magna Bancorp, a Hattiesburg, Miss., thrift company unrelated to Magna of St. Louis.

G. Thomas Andes, chairman and chief executive of Magna Group, acknowledged that the potential "double dip" for Magna investors, if Union Planters were to be sold in the near future, was an important factor in his decision to accept its stock. "That's always in the back of everyone's mind," he said during a conference call to analysts and investors.

Union Planters is getting a relative bargain. By swapping 0.9686 share for each one of Magna Group, the Memphis company is paying three times book value and 22 times estimated 1998 earnings.

First Commercial and Deposit Guaranty both sold for four times book and higher earnings multiples.

The deal is expected to knock 10 cents to 15 cents off Union Planters' 1998 earnings, executives acknowledged, though it should add to earnings in 1999. Union Planters expects to pare expenses of the combined company by $66 million, mainly by combining back-office systems, and to take a pretax charge of $86 million.

As has become customary in merger announcements, the companies refused to estimate how many employees would lose their jobs.

The expansion toward the Midwest is the latest is a series of deals for Union Planters under chief executive officer Benjamin W. Rawlins Jr.

Back in 1991 the company didn't rank among the top 100 in market capitalization. It was the 39th-biggest at the end of 1997, according to the investment bank Keefe, Bruyette & Woods Inc.

Like such merger-minded CEOs as NationsBank's Hugh McColl or First Union Corp.'s Edward Crutchfield, Mr. Rawlins, 59, focuses on making deals while his lieutenants tend to the nuts and bolts of running the business.

"Jack Moore runs the bank," Mr. Taff said, referring to Union Planters' chief operating officer, "and Rawlins makes the deals."

But Mr. Rawlins said it is unlikely his company will make another breakthrough deal while it consolidates its Midwest presence.

"I'm not certain we'll be giving you any more geography in the near term, but we'll be doing fill-ins," he said.

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