Bank of America is likely to make a bid to acquire Barclays PLC, according to a report issued today by Merrill Lynch analysts Edward Najarian, John-Paul Crutchley and Brian Bedell. They argued that an acquisition could prove profitable for Bank of America even if the U.S. financial heavyweight were to pay a premium of 25% or more on Barclays' current share price.
Bank of America spokesman Scott Silvestri and Barclays spokesman John Logie both declined to comment on the report.
If the prediction is correct, the prospect didn't impress Barclays' outgoing chairman, Matthew W. Barrett, who retains only 2,000 Barclays shares after selling his stake of 2.3 million shares Thursday, according to documents filed with the London Stock Exchange. Mr. Barrett will retire Dec. 31 and be replaced by Marcus Agius, deputy chairman at Lazard who was appointed non-executive director at Barclays as of Sept. 1.
Investment bankers who follow the money management industry aren't sure a Bank of America-Barclays combination would offer synergies. In an e-mailed response to questions, Donald H. Putnam, managing partner of New York-based investment bank Grail Partners, noted that Barclays Global Investors, Barclays' money management arm, would be a jewel in anyone's crown, but it's tough to see how an alliance with the money management units Bank of America has accumulated could improve it.
