Shareholders OK B of A-NationsBank Merger
Heeding the advice of Chief Executive Hugh McColl, NationsBank Corp. shareholders cast aside any doubts about BankAmerica Corp.’s recent securities-trading losses and on Thursday approved a merger that will create a banking behemoth spanning from California to North Carolina.
Nearly 73% of eligible NationsBank shares were cast in favor of the combination with San Francisco-based BankAmerica. On the West Coast, 75% of BankAmerica’s shares were cast in favor of the merger, valued at $37.3 billion.
“BankAmerica and NationsBank will be positioned more strongly as a combined company than either of us are separately,” said BankAmerica Chairman David A. Coulter after the vote. “This is even more true in today’s volatile market.”
Coulter will be president of the new company, which will have assets of $570 billion.
The merger is expected to be completed Wednesday.
Despite overwhelming support for the deal from shareholders, Wall Street wasn’t as kind to either bank’s share price on Thursday, as investors continued to fret about potential bank trading losses amid gyrating financial markets.
NationsBank’s shares fell $4.38, or more than 7%, to close at $54.38 on the New York Stock Exchange. The stock has tumbled from a peak of $88.44 in mid-July.
BankAmerica’s stock--which was above $100 in July--was off $5.25, or 8%, to $60, in trading on the NYSE on Thursday.
BankAmerica has suffered more than $300 million in securities trading losses this quarter. But that shouldn’t affect confidence in the long-term strategy of the merger, McColl said.
“We know there will be losses,” he said in response to a question from one of only two shareholders who spoke against the deal. “We have the financial power to deal with whatever comes up.”
In his remarks to several hundred shareholders and employees at the meeting in Charlotte, N.C., where NationsBank is headquartered, McColl said the most attractive part of the merger is adding California and its 35 million residents and the Pacific Northwest to the franchise.
