
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, September 23, 1993                   TAG: 9309230081
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE: CHARLOTTE, N.C.                                LENGTH: Medium

BANK BUYOUT REMOTE

Some of the air has started leaking from the story that NationsBank Corp. was considering making an offer for New England's biggest bank company, Fleet Financial Group.

Although Charlotte-based NationsBank on Wednesday maintained its standard public position of refusing to comment on merger activity and market speculation, sources said the bank was quietly telling some people there wasn't anything to get worked up about.

Tuesday, investors chased shares of Fleet, spurred by comments by First Boston Corp. bank analyst Thomas Hanley that a merger between NationsBank and Fleet was a possibility.

While some market watchers were skeptical, plenty of people seized on the news and pushed Providence, R.I.-based Fleet onto the New York Stock Exchange's most-active trading list Tuesday.

On Wednesday, though, Fleet's shares acted less like those of a courted company, rising just 25 cents to close at $34.25.

NationsBank's shares also didn't behave like the stock of a company in ardent pursuit; they rose 25 cents to close at $49.125. Typically, shares of acquiring companies fall, as investors sell their holdings to avoid having the value of their stock diluted.

Wednesday, analysts said a NationsBank purchase of Fleet would be a legal nightmare, and it's just not consistent with what NationsBank has said it plans to do. Legal hurdles "prevent any deal right now," said Richard Stillinger, a bank analyst with Keefe Bruyette & Woods Inc. in New York.

The main obstacle is the Southeast regional banking compact, created in the mid-1980s to keep bigger Northern banks from buying smaller Southern banks. Several Southeastern banks have since grown as big as their Northern brethren, but the barrier now limits the expansion of Southeastern banks outside of the region.

There are other puzzle pieces that don't seem to fit.

In the world of big-time bank mergers, a small handful of legal experts usually are brought into the process fairly quickly. A check with several law firms found that the best-known bank-merger lawyers said they are not working on a deal.

by CNB