UPDATE: Wachovia Corp. stock has been selling at around $24 a share, same as in the mid-1990s. It could be worth $40+, writes Deutche Bank analyst Michael Mayo, if CEO Kennedy Thompson's firing last weekend results in a big restructuring, asset sales, or a sale of the bank.
Who'd buy? Mayo likes JPMorgan Chase & Co., which has survived the worst of the credit meltdown, and whose bargain-hunting CEO, Jamie Dimon, is on record coveting branches in Florida, California and Texas, plus brokerage everywhere, which Wachovia has.
JPMorgan already employs around 5,000 in the Philadelphia area, mostly in its Wilmington credit card shop. But it wouldn't necessarily covet Wachovia's market-leading position in slow-growth Philadelphia. JPMorgan-Wachovia would be so big that the federal government would probably make it sell hundreds of branches. So there's an outside chance such a hypothetical deal would result in the re-sale of the Philadelphia business.
EARLIER: David Hendler, the former SmithBarney bond chief who runs CreditSights Inc. www.creditsights.com, has handicapped potential acquirers for Wachovia, the nation's #4 bank (and Philadelphia's largest, thanks to its acquisitions of Fidelity, PNB, First Pennsy, and others in the 1990s) following Thompson's ouster.
Hendler sees Wachovia, trading below its book value, as a good fit for growth-minded, cash-rich Royal Bank of Canada, or for JPMorgan; also as a good balance for investments-oriented Bank of New York Mellon, or West Coast-focused Wells Fargo & Co.; and maybe for U.S. Bancorp. HSBC. Citigroup needs Wachovia's branches and customers, but it's struggling to boost capital, and Hendler calls it a longshot.