Banc One Bid for Bank of Boston Ended : Mergers: Withdrawal of $5-billion offer marks third aborted deal for bank. Talks may continue.

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From Reuters

Bank of Boston Corp. lost a third potential suitor when Banc One Corp. said Monday that it has withdrawn a $5-billion takeover offer.

The announcement came just a day after CoreStates Financial Corp. and Bank of Boston called off a $4.2-billion merger that had been coolly received on Wall Street.

Before that, Mellon Bank Corp. had been talking with Bank of Boston about a merger that was scrapped in favor of the aborted CoreStates deal.


Banc One, based in Columbus, Ohio, said it was withdrawing its $45-a-share offer for Bank of Boston, which it said was also made Monday and was higher than the amount CoreStates had offered.

Although it withdrew the offer, Banc One said it wants to pursue talks with Bank of Boston.

“We made an offer for the Bank of Boston because we have a stated interest in the region and the company has significantly improved its performance over the last two years,” Banc One Chairman John McCoy said in a statement.

“The Bank of Boston board of directors took the right action by terminating the proposed transaction with CoreStates, and we would welcome an opportunity to talk to the Bank of Boston about a possible affiliation with Banc One under more normal circumstances,” McCoy added.

CoreStates and Bank of Boston terminated preliminary talks for a possible merger late Saturday, saying they were unable to agree on a plan that benefited shareholders, customers, employees and communities.

In that proposed merger of equals, both companies’ stocks took a hit after word of the deal leaked out. Analysts said they now expect Bank of Boston to remain independent.


“I think Bank of Boston management wants to stay independent. It appears a chunk of the board has a different point of view, but the majority of the board clearly supports management,” said PaineWebber Inc. analyst Lawrence Cohn.

A source familiar with the situation said all the terms of a merger had also been worked out between Bank of Boston and Mellon late last week, when Bank of Boston Chairman Ira Stepanian told his board to pursue a merger with CoreStates instead. CoreStates then withdrew from the talks, the source said.

With all the merger talk defused, Bank of Boston’s stock rose $1.875 to $42, while Banc One finished off 50 cents at $31.50.