Despite recent speculation, St. Louis-based Mercantile Bancorp. may not be ready to sell just yet.

Mercantile's stock closed Monday at $52.125 a share, up 93.75 cents for the day.

The stock had begun to shoot up last Tuesday after bank analyst Thomas H. Hanley of Warburg Dillon Read named Mercantile his top takeover candidate and said it could sell for $65 per share.

By late in the week, analyst Diana Yates of A.G. Edwards & Sons Inc. in St. Louis countered with her own report, saying she did not believe any potential acquirer was prepared to do a deal. The merger speculation was inflating Mercantile's stock, she added.

Mercantile declined to comment Monday.

Mercantile could attract a number of buyers, but it is in the midst of a cost-cutting program that is scheduled for completion late next year. At the same time, most of the banking companies that might be interested in buying Mercantile are busy integrating other acquisitions.

Bank One Corp., for instance, is focused on last year's takeover of First Chicago NBD Corp. Bank One, considered to be the most logical buyer because Mercantile would fill a geographic hole in its territory, is staying away from large acquisitions this year because it is otherwise occupied, according to chairman John B. McCoy.

However, Mr. McCoy has acknowledged strong interest in the St. Louis marketplace. He has said that Bank One would have liked to have bought Boatmen's Bancshares, which went to NationsBank Corp. of Charlotte, N.C., in 1997.

Ms. Yates and other analysts said Bank One would lose credibility on Wall Street if it pursued a large deal now.

Other logical buyers for Mercantile, according to analysts, are First Union Corp., Firstar Corp., National City Corp., and U.S. Bancorp. All these companies declined to comment.

Sources close to Mercantile said chairman and CEO Thomas Jacobsen would prefer to find a friendly buyer, perhaps a company that would give him a role in the post-merger company. For that reason, neither U.S. Bancorp nor First Union would probably be Mr. Jacobsen's first choice. Moreover, many observers doubt that Charlotte-based First Union is interested in a company that small and that far away.

Firstar Corp., which is in the midst of its own merger integration with Star Banc Corp., may be too busy to do a deal. One knowledgeable source said Firstar does not plan to consider any acquisition before late this summer.

All of this has led observers-including people close to the company, investment bankers, and analysts-to dub National City the most likely buyer of Mercantile. For one, Mr. Jacobsen is friends with David A. Daberko, chairman and chief executive of National City. The two sat together on the board of the Student Loan Marketing Association from 1987 to 1997. Mr. Daberko has said he would prefer not to do a big bank deal this year and that he is focused on last year's acquisition of First of America Bank Corp.

Ms. Yates said National City could buy Mercantile for $58 to $60 per share, which would be 19 to 20 times Mercantile's estimated 1999 earnings and about three times its book value. Ms. Yates said that price would be based on an acquirer's being able to cut 20% to 25% of Mercantile's total cost base. She said she does not expect a deal until much later this year.

Some analysts have put the potential acquisition price higher. In his recent "Merger Modeler" report, analyst Michael Plodwick of Lehman Brothers said National City could buy Mercantile for $63.23 a share, without dilution, if 20% of its expenses are cut.

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