UPDATE 2-Wachovia need not raise capital in near-term - Deutsche

jueves 19 de junio de 2008 19:23 CEST
 

(Recasts; adds analyst comments, background; updates share price details)

By Tenzin Pema

BANGALORE, June 19 (Reuters) - U.S. bank Wachovia Corp WB.N, which is the subject of takeover speculation after a series of missteps, is unlikely to raise more capital in the near-term and makes a "uniquely attractive" merger partner, according to an analyst at Deutsche Bank.

The company's stock price is over 50 percent lower than its estimated franchise value of $39.54, analyst Mike Mayo said in a note to clients.

"We mention the takeover possibility solely based on the experience of past companies that have traded at big discounts to their franchise values," Mayo said.

"This type of discount is extremely unusual. JPMorgan Chase & Co (JPM.N: Cotización) has indicated that it wants to pursue retail banking transactions in the Southeast, and Wachovia is twice as big as the next largest independent regional bank in the region (SunTrust Banks Inc (STI.N: Cotización))," Mayo said.

Wachovia earlier this month ousted Chief Executive Kennedy Thompson, a move that raised speculation that the bank could become a takeover target.

"A new CEO could be a positive catalyst," Mayo said. Alvaro de Molina, GMAC Financial Services' chief executive officer and former chief financial officer at Bank of America Corp (BAC.N: Cotización), would be a good fit, the analyst said.

"We assume that he (Molina) would want it and, if he did not, would hope that Wachovia would find a way to help change his mind," Mayo said.   Continuación...