ABA Banking Journal - January 2008 - (Page 33) M&A OUTLOOK The price is right, but who will buy? Depressed share prices and market stress affect potential buyers and sellers. Look for a foreign invasion. ILLUSTRATION BY DENNIS O’CLAIR K evin Rollins, former CEO of Dell, once asked what criteria determined the success of any merger. The answer, he claimed, was that it would have to be that the companies are stronger financially, that they took market share, and that they are on a very steady footing in terms of their performance. With the recent credit crisis causing a hemorrhaging of their market value, steady performance and strong financials are not By Judson Harmon, senior analyst, Financial Institution Group Research, SNL Financial LC, Charlottesville, Va. jharmon@snl.com phrases currently associated with many banks. But potential buyers can smell the blood in the water and may want to take advantage of this opportunity. The problem is, many of them are saddled with their own issues in a turbulent market rife with uncertainty. So even though acquisitions are an enticing proposition, it is likely that deal activity on the whole will drop this year. If a buyer wants to take a chance to gain market share, there will be enough willing sellers out there. As bank executives face an increasingly difficult environment, they will examine more drastic strategic alternatives. Depressed stock prices and lower www.ababj.com/subscribe.html ABA BANKING JOURNAL/ABA BANKING JOURNAL/JANUARY 2008 33 http://www.snl.com/ http://www.ababj.com/subscribe.html
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