WELLS FARGO OPEN TO BUYOUT; CHAIRMAN, CEO SAYS MEGABUCK MERGERS HAVE BANK EXAMINING ITS OPTIONS.Byline: Sam Zuckerman Bloomberg News Wells Fargo & Co., the second-largest California bank, would consider a buyout as a wave of mergers in the industry pushes stocks to record highs, the bank's top executive said. Chairman and Chief Executive Paul Hazen said in an interview that the high prices banks are commanding in buyouts make a sale something Wells Fargo has to consider. Its stock rose 15 13/16, or 5 percent, to 332 1/16 after it surged as much as 10.7 percent in trading of 1.78 million shares, more than four times the daily average of the past three months. ``At these kinds of multiples, these kinds of prices, if somebody came to you with a story that would cause the currency of the combined company to appreciate, then I'm open to it,'' Hazen said. Banks are buying each other at a record pace as they seek to cut costs and boost profits. First Union Corp. agreed to purchase CoreStates Financial Corp. for more than $16.1 billion last month, a record price for a U.S. bank. The price was 5.39 times CoreStates' book value Book Value 1. The value at which an asset is carried on a balance sheet. In other words, the cost of an asset minus accumulated depreciation.2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities. Notes: Book value is the accounting value of a firm., essentially its assets minus its liabilities. NationsBank Corp. said in August it would pay $13.8 billion for Barnett Banks Inc., equaling 3.99 times book value and 25.2 times earnings. National City Corp. earlier this month agreed to buy First of America Bank Corp. for $7.1 billion, equaling 3.84 times book value and 22.8 times earnings. Wells now trades at about 2.25 times book value and more than 31 times earnings. ``It could happen,'' said James Schmidt, a portfolio manager at John Hancock Funds, which owned about 362,000 Wells Fargo shares at the end of September, about a purchase of Wells. Hazen didn't say his bank is in acquisition talks, and a bank spokeswoman declined to comment. Hazen was interviewed at the Bank Administration Institute retail conference in New Orleans. ``It's my belief that no discussions are currently going on,'' said Donaldson, Lufkin & Jenrette Securities Corp. analyst Thomas Brown. |
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