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Commerzbank stock spurts
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September 3, 1999: 8:43 a.m. ET
Shares of number-four German bank shoot up 4% amid bid talk
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LONDON (CNNfn) - Commerzbank, Germany's number-four bank, saw its shares jump more than 4 percent Friday as it became the latest focus of bid talk in the fast-consolidating financial sector.
Shares of Commerzbank (FCBK), which trails rivals Deutsche Bank (FDBK), HypoVereinsbank and Dresdner Bank (FDRB) in size among German banks, shot up 4.1 percent to 35.55 euros in Frankfurt amid speculation that it's in the sights of Switzerland's Crédit Suisse.
Commerzbank has refused to comment on the rumors, citing company policy regarding market speculation. At the same time, analysts say, the bank has worked aggressively to establish a series of partnerships in Europe that have given it added leeway as it scouts out the possibility of a full merger.
Italy's Generali Group has a 5 percent cross-shareholding in Commerzbank, while BCI-Intesa has 2 percent and Spain's BCH Santander, 3 percent.
Keith Baird, a bank analyst with Enskilda Securities, said the market tended to view Commerzbank as "too small to go it alone," making it an ideal prospect for consolidation.
A 'wait-and-see' stance
"My view," Baird said, "is that Commerzbank is adopting a wait-and-see attitude with respect to European consolidation" and is relying on its network of partners until the time when some form of merger appears inevitable.
Commerzbank's gains Friday drew momentum from comments by its chief executive, Martin Kohlhaussen, to the German daily Die Welt . He said he's interested in creating a joint investment bank operation with France's privatizing Crédit Lyonnais, Spain's BCH Santander and Italy's BCI-Intesa. But the Commerzbank chief cautioned that a deal isn't imminent.
"I assume we will make progress there in 2000," Kohlhaussen told the newspaper. He also sought to play down speculation that Commerzbank already has laid plans for a full-blown merger of the partner banks.
"That may be a second step perhaps. But in the first step one has to seize interesting options. I don't want to rule anything out, but there is no plan for that at present."
Commerzbank's stock rally comes less than two weeks after Deutsche Bank, the world's largest bank in terms of assets, confirmed it is in talks with Dresdner to join their retail banking operations. Deutsche operates 1,600 branches and Dresdner 1,400, with each bank having around 6 million retail customer.
Deutsche's European plan with Dresdner, which would be short of a full-blown merger, follows its multi-billion-dollar buyout of U.S. Bankers Trust.
Dresdner, for its part, has signaled interest that it may seek an alliance with HypoVereinsbank in the event its talks with Deutsche don't result in a deal.
In Britain, financial-sector consolidation got an extra spur Friday from news that National Westminster Bank is in talks to pay as much as $17 billion for insurance and pensions group Legal & General. 
-- from staff and wire reports
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Commerzbank
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