ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, August 31, 1996 TAG: 9609030036
SECTION: BUSINESS PAGE: A6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Bloomberg Business News
NationsBank Corp. agreed to pay $8.74 billion to buy Boatmen's Bancshares Inc., a stock and cash price that sent its shares into the biggest one-day decline in six years. Investors, who had bid up NationsBank shares this year after it said it would halt acquisitions, found the price for St. Louis-based Boatmen's too high. NationsBank shares tumbled as much as $7.25, or 8.4 percent, to $85.12 1/2, wiping out about $2.2 billion of its market value.
``If you look at the pricing here, it really is eye-popping,'' said analyst Thomas Theurkauf of Keefe, Bruyette & Woods Inc.
NationsBank bought Atlanta-based Bank South for $1.6 billion in January. It also acquired three smaller banks in Florida. It has the No. 1 market share in Georgia, Virginia, Maryland and Texas.
NationsBank Chairman and Chief Executive Hugh McColl Jr. had promised he wouldn't make an acquisition that hurts NationsBank's earnings, and some investors think he broke that pledge.
``We've all been holding our breath for the past couple of months, expecting they might do a deal, and they did an expensive one,'' said Scott Edgar, research director for the Sife Trust Fund.
``The stock had run up based on his word that he would stay at home and take care of his own business and not do big deals,'' Edgar added. ``Then along comes about the biggest deal they could do.''
LENGTH: Short : 35 linesby CNB