Last week weh we were going long on Oils and suggested that Banks may be subject to take over - the two news were posted on this thread after we had news that not only OPEC but non-OPEC members will be lining for the huge cuts in excess of marekt expectations, on US Banks we deduced from what was appearing in France the hostile take over bid, now one way I look at these situations is to look back and see what happened to the two sectors on Oils we had this great move but most interestingly it was this news that attracted my attention. Posaitive analysis based on reasonable deductions always result in market action as forcasrted.. WE thought it would be Banks of New York-- it is now Bank Boston... Good to be in forefront of making news
not following them.. Anyone going thru my post on last Thursady night must have seen the equation drawn and the first bid is on the anvil..
BANKBOSTON: Fleet launches $16bn takeover
By William Lewis and Richard Waters in New York and Victoria Griffith in Boston
Fleet Financial last night announced the $16bn takeover of BankBoston, in a move to create a bank that will dominate the New England region and be the eighth largest in the US by assets.
The proposed takeover brings an end a dizzying series of would-be mergers that Bank-Boston has attempted, but failed to complete, over the past four years.
New England's oldest bank, BankBoston set its sights on becoming the region's biggest financial institution in the mid-1990s, only to see itself outflanked by Terrence Murray, the long-time chairman of Fleet. It was foiled when Fleet snatched control of another local institution, Shawmut, ending Bank-Boston's hopes of acquiring either institution.
While Fleet's shares are close to their all-time high, Bank-Boston stock price has not recovered from the hit it sustained when the Asian crisis spread to Russia and Brazil last year.
Concerned that a fifth of its earnings came from emerging market countries before the crisis, Wall Street has remained wary of the bank's prospects and its shares are 25 per cent below their level early last summer.
With its focus on the US, Fleet saw its earnings rise 12 per cent to $1.53bn last year, while BankBoston fell 10 per cent to $702m.
With $104.4bn in assets, compared to $73.5bn at BankBoston, Fleet numbers itself among the 10 largest banks in the country. Its focus has been on expanding outside its home region through a number of specialist subsidiaries involved in activities such as credit cards and leasing.
The new bank, to be called Fleet Boston, will have a market capitalisation of about $40bn. Under the terms of the deal, termed a merger by the two companies, shareholders in BankBoston will receive 1.1844 shares of Fleet for each BankBoston share. The deal values BankBoston shares at $53, or a total of $16bn.
Mr Murray is to be chairman and chief executive of the new group. Chad Gifford, Bank-Boston's chairman and chief executive, will be president and chief operating officer of Fleet Boston. Mr Gifford is to become chief executive at the end of 2001 and chairman a year later.
The companies expect to have to divest a "significant" number of branches, customers and ATMs in order to gain regulatory approval for the deal.
Goldman Sachs and Donaldson Lufkin and Jenrette advised Fleet. Merrill Lynch and Morgan Stanley Dean Witter advised BankBoston.
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