Boatmen 's deal could spark more mergers .
Brad Dorfman
CHICAGO 1996-08-30
The $ 9.5 billion proposed acquisition of Boatmen 's Bancshares Inc. by NationsBank Corp. could spark a flurry of other mergers involving Missouri banks , which until last year were protected from outside buyers by state regulations .
" NationsBank just strolled into the Midwest and bagged the biggest banking trophy in the landscape , " said Michael Ancell , banking industry analyst at Edward D. Jones & Co . "
Whoever wants a big market position in the Midwest has to come in and grab Mercantile or Commerce . "
St. Louis-based Mercantile Bancorp Inc. , a bank holding company with $ 18.04 billion in assets , was seen by many analysts as the most attractive Missouri franchise in size after Boatmen 's .
Kansas City , Mo.-based Commerce Bancshares Inc. , with $ 9.32 billion in assets , also could help a regional bank establish a strong presence in the lower Midwest , analysts added .
" It focuses more attention on Mercantile , Commerce and Roosevelt , " said James Weber , analyst at A.G. Edwards & Sons .
Roosevelt Financial Group Inc is a $ 9.33 billion asset-St .
Louis based thrift .
" Now ... the most coveted bank out there is Mercantile , " Weber said .
Mercantile and Commerce did not return phone calls seeking comment .
Among those seen as having an interest in buying in Missouri are Minneapolis-based First Bank System Inc. and Norwest Corp. , Ohio-based KeyCorp and Banc One Corp. , and First Chicago NBD Corp. in Illinois .
Representatives of First Bank , Norwest , Banc One and First Chicago said the banks do not comment on rumors of possible mergers or acquisitions .
KeyCorp , contacted by phone , would not comment .
With a presence in nine states and $ 41 billion in assets ,
Boatmen 's was the prize in Missouri , where barriers to outside acquirers were brought down last year by a federal banking statute .
" Boatmen 's was the plum of Missouri and was the plum of the central Midwest , " Weber said .
Talk that the Missouri banks were seeking inflated prices from buyers was seen as a reason a deal has not occurred sooner .
But NationsBank 's bid , representing a premium of 40 percent for Boatmen 's stock , was large enough to get the deal done .
" I think Boatmen 's was shopping itself , and everybody knew if you wanted to be the winning buyer here , you had to make the bid nobody would beat , " Ancell said .
But some analysts cautioned that other targets should not expect as large a premium .
They also questioned whether NationsBank can recoup shareholder value with such a large bid for Boatmen 's .
" I think initially some stocks will trade up on sympathy , but the wild premium NationsBank put on this deal here , I do n't see a lot of other deals being done at this premium , " said Michael Durante , analyst at McDonald & Co .