One really has to think this was only a matter of time…
The WSJ Reports:
As the scramble to resolve the Wachovia (WB) situation continues (Wells Fargo (WFC) and Citigroup (C) are sorting it out), National City Corp. (NCC) , a Cleveland-based regional bank crippled by bad real-estate loans, is in talks with a number of banks about a possible sale, people familiar with the situation said.
Among the potential buyers are PNC Financial Services Group Inc. (PNC), a Pittsburgh-based lender that has dodged many of the industry’s problems, and Toronto-based Bank of Nova Scotia. PNC declined to comment Wednesday, and Bank of Nova Scotia (BNS) couldn’t be reached.
National City declined to comment.
In the beginning of October I bought National City shares, not for this situation but because I thought their loan portfolio was notably superior to Wachovia or Washington Mutual (WM), it was still growing its deposit base and the market was pricing it as though either of those scenario’s did not exist.
It might seem other banks agree. With industry consolidation underway full steam, and National City not in dire straits, those institutions in a position to expand their operations are obliged to kick the tires…
Disclosure (“none” means no position):Long NCC, WFC, C, none
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6 replies on “National City in Buyout Talks”
Todd,
I have noticed that you have not been commenting very much on SHLD for awhile. It is getting killed today with the repeal of the short ban. How much longer do you think Eddie can wait before he has to do something? I’ve been really shocked that he hasn’t made any moves as the market goes lower and lower here. This is the perfect enviornment for him to diversify SHLD much like Buffett did with BERK. Why do you think he is not doing anything? From the outside it appears that he still believes he can turn around his core business (which is still up for debate). He has been incredibly reluctant to eliminate unprofitable divisions and re-allocate that capital elsewhere…. why?
ANON,
not much to say. selling anything in this environment isn’t a real good idea as value are real depressed.
i think making a deal in the current environment is a iffy proposition. he can wait, keep the balance sheet in tact and make a deal when there is more clarity on the other side..
he is thinking like a business owner, not a simple shareholder…just like buffett…
remember, buffett did not start making big deals until the 70’s…years after he first bought into Berksire
Todd,
I understand your point, but Buffett realized much quicker than Lampert appears to that the business was in a steady state of decline. He bought National Imdemnity in ’67 to try to level out the earnings and to get a hold of the float. It seems that Eddie has no intention of diversifying like Buffett did in the near future… which is really puzzling to me. He is just basically sitting with what he has and letting parts of the business continue to generate little to no return. Eddie also continues to buy things for ESL, which worries me. At some point it seems to me that he needs to make a decision who he is more committed to, ESL or SHLD. SHLD is killing ESL’s performance, so I am assuming that he will need to make some kind of decision relatively soon on that. What do you think?
I don’t think he is unwilling, i think the current environment makes doing anything of value prohibitive..
they have invested quite a bit in the online store and results there are showing that…
don’t forget that the separation of the units is undergoing and that there will be value created from that when it is complete..
i understand you frustration but macro conditions now just do lend themselves to doing anything..
The previous poster is right Todd. Eddie is running out of time here. He needs to figure out something to stop this plumeting share price or SHLD could be in some real trouble. Think about what could happen if Miller is forced to sell out. The floor drops out…
Your insight on SHLD seems somewhat lacking. You obviously believe in Eddie, for which you have good reason… the man has a great track record. However, he has got quite a situation on his hands with SHLD and if he doesn’t do something fairly soon his time may run out.
anon,
can you point out a large retailer right now, other than the big two, wmt, tgt, that are not suffering?
the macro environment could not be worse, yet, sears is still profitable, has almost no debt, plenty of cash and a stable shareholder base…
People have been saying “time is running out” for sears for years now. yet it’s financial situation is stable while the competition’s has deteriorated significantly..
time will tell..