Bank of America Corp. may be "very interested" in buying Barclays PLC in what would be the world's biggest financial-services acquisition, analysts at Merrill Lynch & Co. said Friday.
Shares of Barclays, the United Kingdom's third-biggest bank, rose the most in six months after analysts wrote to investors that Bank of America's "next big acquisition will likely be Barclays" and "a deal could be announced near term."
Since 2001, Bank of America has spent more than $90-billion on takeovers. A Barclays acquisition could cut costs by as much as $2.95-billion and expand investment-banking, credit card and asset-management operations, Merrill Lynch said.
"Bank of America has previously indicated that the next phase of its expansion is to become a leading global commercial and investment bank," Merrill Lynch research analyst Edward Najarian wrote in a note to clients Friday. "In order to achieve that goal, we believe Bank of America is very interested in acquiring Barclays."
Bank of America, the second-biggest U.S. bank, fell 83 cents, or 1.6 percent, to close at $51.66 on the New York Stock Exchange. Bank of America was Florida's largest bank in terms of deposits until Wachovia acquired World Savings Bank this year.
The U.S. lender could pay 25 to 30 percent over Barclays' share price, the analysts said. Barclays shares trade at 11 times estimated 2006 earnings, compared with 12 times earnings for HSBC Holdings PLC and Lloyds TSB Group PLC, according to Bloomberg News.
"We don't comment on market rumor or speculation," said Scott Silvestri, a spokesman for Bank of America of Charlotte, N.C. A spokesman for Barclays also declined to comment.
Information from Bloomberg News and the Associated Press was used in this report.