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BB&T Corporation Message Board

  • Bankhound Bankhound Aug 26, 1998 9:41 PM Flag

    BBK a Takeover play?

    Is BBK a take over play? I don't think the odds
    are very good. With STI being hammered for a 30%
    (supposedly) premium deal, as the trend has gone, I do not
    believe that the bigs are too excited about following
    suit, and having their stock price pummeled. The market
    is not very friendly to true acquisitions at this
    point, and the take out multiples a coming down, as
    clearly evidenced in the community banking arena. Look at
    National Commerce this past week. They couldn't even find
    a buyer, and had to take themselves off the market.
    Used to be that you could sell in a weekend. They only
    had 3 banks even interested, and only Fifth Third bid
    (at a Walmart price). And they are a decent bank.
    So...have we seen the beginning of the end of the
    consolidation wave for now. Well, my opinion is that high
    performing banks like BBK are somewhat untouchable until
    their price falls nearer 2.85 - 3.0 x book, or, as
    Stockboy II noted, management sees a wall in terms of
    growth, margins, and/or efficency. Come on, they are
    trading at 3.8 x book now. The market wouldn't allow more
    than 4.5x book, or else the acquirer would likely
    experience an STI/CF replay. Would BBK sell for less than a
    single multiple (less than $8 / sh. gain)? I just can't
    see it.

    Just my opinion, but the trend has
    begun.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Good thoughts regarding STI. I have always
      admired the STI group and feel they will be successful in
      the long run. Maybe timing just wasn't right for the
      CF deal - whatever - it just doesn't seem to fit
      well. Wish I could explain further, but really can't
      formulate it. The folks in Virginia love CF and are quite
      leery of STI. But then again, they are leery of most
      banks coming in from the outside.

      Living to 100
      - YUK! But thanks for the thought
      anyway.

      TrustSTI- Good luck with all your investments and may we
      both end up rich in life and financially!

      Dr.
      JunJun

    • sorry for all the posts. I thought they were disappearing. And yes, my shares are in a 401-K.

    • Thanks for the clarification. As to STI, I think
      I have the same feeling for the future of that
      organization as you seem to have for BBK. You are correct that
      the CF shareholders seem dissatisfied. That is if the
      postings on their board is truly indicative of all CF
      shareholders. I felt the same way when the bank I worked for
      was acquired by STI. The merger will happen and CF
      holders will be well rewarded. STI is an unknown to CF
      folks and most of the readily accessible info doesn't
      tell all. As for an STI-BBK merger, I think
      geographics and management philosophy are strong incentives
      as I don't think an STI-WB can happen after Crestar.
      Live long and prosper. I'll bet you make to 100.

    • Thank you for your response, and I agree with
      you. We all have different time horizons, investment
      objectives, and maybe LOTS of BBT shareholders would like a
      buyout so they can reap their rewards quickly.

      I
      think I will live to 90, so i want our bank to grow the
      old fashioned way, BUY everyone else out before you
      get eaten!!!!!!!!!!!!

      Thanks for your
      bantering on the board readum.

      Dr. JunJun

    • No, of course I believed the intention of STI was
      to grow the bank.

      My point was (and terribly
      made, i aplogize) was that you can grow the bank
      through acqusitions such as main street bank, Scott and
      stringfellow, or you could get bought out, and throw caution to
      the wind hoping it will pay off for us the
      shareholders. I like the bank growing concept. I belive there
      is a much BIGGER payoff eventually, rather than a
      quick spike, and then hope the new bank succeeds. We
      are proven now!

      I am not convinced that the
      merger of ST-CF was/is a good thing for either bank. I
      also don't think the shareholders of CF agree that it
      is. Just my opinion.

      Tell me more about why
      STI-BBT would be good?

      Dr. JunJun

    • The end IS probably here for rediculous
      multiples, except the real reason is that the big boys have
      lost the trump card in getting the deals done. That
      would be their own stocks at rediculous levels. The
      further bank stocks fall, the lower the multiples they
      are able to pay.

      • 1 Reply to readum98
      • Noticed your rather bearish comments on bank
        mergers in the future. What do you consider a redicules
        mutltiple? The way I see the deal between BBK and MSBC it
        was at 3.25 times book or about a 50% premium over
        their closing price yesterday. Looks like a premium
        price to me. If CAFC were sold at 3.25 times book the
        sales price would be about $46.00 and CAFC is currently
        selling at about $21. That too would be a good multiple.
        I don't think banks hey days are over yet. (They
        might be dented if the market keeps
        tanking.}

        Comments?

    • Hey, Dr JunJun, your boys are buying again.

      This time it's MainStreet of Martinsville, VA.

      Check it out:

      http://biz.yahoo.com/prnews/980827/nc_bb_t_ac_1.html

 
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