A possible banking mega-deal is the talk of Wall Street today. Merrill Lynch is apparently telling clients that Bank of America is interested in acquiring Britain’s Barclays -- a move that would make Bank of America the world's largest bank. To some--the merger makes a lot of strategic sense because of the synergies both sides would bring to the table.
On today’s "Closing Bell" Dylan Ratigan took a closer look at the speculation and whether it could become reality. His guests were Jeff Harte, Managing Director in Equity Research at Sandler O'Neill along with Jefferson Harralson, Analyst at Keefe, Bruyette and Woods.
Jefferson Harralson said Bank of America is interested in growing their global brand – but at the right price. It would take two banks to make this deal happen and Harralson said he doesn't think Barclays is for sale.
Jeffery Harte agreed and added Barclays is too big. If this deal would come together--Bank of America would have to put $100 of billions in - to capitalize Barclays to U.S. standards.
Harte says this is by no means a new rumor – it seems to circulate every few months. Harte says it might happen some day but not soon.
Harte says, "I have a hold on Bank of America over long term growth potential – (but considering the stock dropped on the news ) I think a good trade might be buy Bank of America on this weakness. Again, I don’t think a deal is going to be announced and if that proves true, the stock will be up again kind of quickly next week."
Note: Neither Bank of America nor Barclays are commenting on speculation of a merger.
Analyst disclosure for Jeff Harte: Sandler O'Neill expects to receive or intends to seek compensation from Bank of America Corp. for investment banking services in the next three months.
Analyst disclosure for Jefferson Harralson: Harralson and members of his family own BAC stock and BAC is an investment banking client of his firm.