The rumor mill continued at full pace Monday on the heels of a British news report over the weekend that Barclays PLC of London has talked with three U.S. banking companies on the East Coast about doing a deal.
The report, in The Independent of London, said that Barclays met with Sovereign Bancorp of Philadelphia, Greenpoint Financial Corp. of New York, and North Fork Bancorp of Melville, N.Y.
Sovereign, which for some time now has been atop the list of companies investors see as takeover candidates, had reportedly been courted earlier by Barclays' U.K. rival, Royal Bank of Scotland PLC. But it was said to have rejected the offer and has given little indication that it is interested in selling.
"Now there are a number of new players," said Peter McCorry, a senior trader at Keefe, Bruyette & Woods Inc. And "you have a new name" as a possible acquirer, he said, which should give shares of likely acquisition targets new momentum.
Indeed, shares of Greenpoint rose about 2% in morning trading, though the overall market fell. North Fork got less of a bounce, as many observers believe it is not for sale.
Greenpoint ended up rising 0.7% and North Fork closed up 0.2%. Barclays stock fell 0.9% at the London Stock Exchange.
A Greenpoint spokesman would not discuss the rumor, but the company has said repeatedly that it would be open to an offer. It has also said it plans to grow through acquisitions of its own. In an interview with American Banker this summer, chief executive Thomas Johnson said that he is "not naive enough to think we're going to be a permanent independent."
John Kanas, North Fork's chairman, president, and chief executive, was traveling Monday and did not return phone calls by press time.
However, Frank J. Barkocy, the director of research at Keefe Managers Inc., a hedge fund specializing in financial stocks, gave what he called "the rumor du jour" little credibility. "North Fork is the least likely to sell."
Steven Wharton of Loomis, Sayles & Co. questioned what Barclays stands to gain from acquiring Greenpoint or North Fork. A U.S. buyer could get more cost savings and revenue synergies out of a potential deal with Greenpoint, he said.
However, Bear Stearns & Co. analyst Salvatore J. DiMartino wrote in a research report Monday that a deal with Greenpoint would provide a perfect way for Barclays to enter the New York metropolitan region.
A Barclays spokeswoman in London would not discuss the rumor Monday but did say that the company has "never specified" whether or not it is interested in U.S. acquisitions. Back in March, it had been rumored as a takeover candidate itself, with Bank of America Corp. as potential buyer. Indeed, it was Bank of America's $47 billion deal for FleetBoston Financial Corp. two weeks ago that sparked the latest round of consolidation rumors, as everyone tried to guess who the next target might be.
Sovereign is said to have rejected the Royal Bank bid because it offered only $25 a share. According to The Independent, Barclays first approached it but later turned its attention to Greenpoint and North Fork instead.
Mr. Barkocy said Jay Sidhu, Sovereign's chairman, president, and chief executive officer, told investors at a dinner last week that it would take "an insane offer" for Sovereign to sell. Asked by investors what such a price could be, Mr. Sidhu would not discuss it but left investors with the impression that it could be above the $30 a share the company was rumored to have set as target, Mr. Barkocy said.
