GB&T shares jump on SunTrust merger agreement; BMO stock edges up on Pyrford purchase plan

By Sheri Kasprzak

New York, Nov. 2 - Shares of GB&T Bancshares, Inc. were boosted Friday by news that SunTrust Banks, Inc. will buy the bank holding company in a $153.7 million transaction.

One trader said the GB&T shareholders will benefit from the transaction and that the deal may be a sign of the times.

"Many folks were short GBTB," said the trader. "Still a slight discount at current trading levels to deal value. For GBTB shareholders, you end up with a stock with a higher, more confident dividend payment and a chance to double-dip, being that [SunTrust] at these prices is a very attractive candidate for a take out.

"This really exemplifies what will happen in the banking industry going forward, [like] the early 1990s with weaker banks getting taken over by stronger ones. You get major cost efficiencies and the issues are dealt with...I see similar prospects for the likes of National City Corp., First Horizon National Corp., CIT Group Inc., Sovereign Bancorp, Habersham Bancorp and many others."

An analyst, in response to this, said he's already seeing this activity.

"We've seen a number of cases this year where bigger banks have eaten up smaller ones," he said. "The market we're in now makes it incredibly difficult for smaller, regional banks to survive, so the big names are really circling like sharks."

Earlier this year, TD Bank Financial Group said it will buy Commerce Bancorp Inc., a Cherry Hill, N.J.-based regional bank, in an $8.5 billion cash and stock transaction.

In September, a Royal Bank of Canada subsidiary agreed to purchase Alabama National BanCorporation in a $1.6 billion deal.

Shares of GB&T jumped by 20.8% on Friday after the merger news came out in the morning.

In other news, BMO Financial Group entered into a deal to buy British institutional asset manager Pyrford International plc. The terms of that transaction were not disclosed.

Shares of BMO were up Friday, gaining 1.17%.

Meanwhile, one trader said he feels now is the time to buy Countrywide Financial Corp. The mortgage lender has suffered major slides in its stock as a result of this year's subprime shakeup.

A trader said Friday, "This is [a] great buy here now," in response to a letter from Legg Mason Value Trust's Bill Miller.

"After falling 20% in only a few days on no news and this after being down 50% for the year, CFC rallied over 30% in one day once they reported their results and indicated they would be profitable for the fourth quarter and expect to earn a reasonable return on equity of 10% to 15% for all of 2008," said the letter from Miller, in part.

"The price action on both sides was driven by emotion - first fear, then relief - and was hardly the result of a careful analysis of Countrywide's long term business value. That, by the way, we think is in the $40s, compared to its current price of about $14 to $15."

On Friday, Countrywide's stock slipped by 8 cents, after trading between $13.61 and $15.03, to close at $14.35 (NYSE: CFC). The stock gained 5 cents in after-hours trading.

SunTrust to buy GB&T

Moving back to SunTrust's purchase of GB&T, GB&T shareholders will receive 0.1562 SunTrust shares for each GB&T share held, based on a $69.13 SunTrust closing stock price on Thursday. This gives the merger a $153.7 million value.

The transaction is set to close in the second quarter of 2008.

GB&T's stock gained $1.83, or 20.8%, to end the day at $10.63 (Nasdaq: GBTB). SunTrust's stock dipped by 1.33%, or 92 cents, to close at $68.21 (NYSE: STI).

GB&T is a regional bank based in Gainesville, Ga., and operates 32 banking offices in north and central Georgia.

"With this transaction, we're taking advantage of an unusually attractive and timely opportunity to efficiently expand our metro Atlanta franchise in line with our long-term growth strategies and consistent with our high financial standards and disciplined approach to merger," said James Wells, SunTrust's chief executive officer, in a statement.

BMO to buy British asset manager

Elsewhere Friday, BMO Financial Group announced plans to buy Pyrford International, a London-based institutional asset manager.

The terms of the transaction were not revealed Friday.

Shares of BMO were up on Friday, gaining 76 cents to close at $65.73 (NYSE: BMO).

Pyrford provides asset management services to pension funds, charities, endowments, foundations and high net-worth individuals.

"Today's announcement marks an important move for BMO into the international money management space as we continue to expand our internal investment management capabilities outside of North America," said Gilles Ouellette, CEO of BMO's Private Client Group, in a statement.

"The acquisition of Pyrford will provide us with investment expertise in a number of regions that complement our current wealth-management presence in Canada, the U.S. and in China with our stake in Fullgoal Fund Management."

The merger is set to close in December.

Jacobs may buy Carter & Burgess

Elsewhere in merger talk, Jacobs Engineering Group Inc. is considering the purchase of Carter & Burgess, a Fort Worth, Texas-based architecture, engineering, design and planning firm.

The terms of the deal were not released.

Shares of Jacobs were off Friday, slipping by 63 cents to close at $83.80 (NYSE: JEC). The stock went on to lose another 31 cents after hours.

"We are excited about the prospect of joining Jacobs," said Ben Watts, the CEO of Carter & Burgess, in a statement.

"This combination enables both firms to address the challenges and emerging trends faced in our industry, which include addressing the aging infrastructure in America and access to talent to respond to the ever-increasing demand in our marketplace. It also allows Carter & Burgess to leverage our capabilities in the market and compete for some of the largest projects in the world."

MedQuist ponders sale

MedQuist Inc., a company that provides electronic medical transcription services, is evaluating a possible sale of the company.

The news sent shares of MedQuist up Friday by 15 cents, or 1.32%, to close at $11.50 (Pink Sheets: MEDQ).

In a statement released Friday morning, MedQuist said it is "evaluating whether a sale of the company is in the best interests of the company and its shareholders, in light of the announcement earlier today by Koninklijke Philips Electronics NV of its decision to proceed with the sale of its 70% ownership interest in the company if a satisfactory price and other acceptable terms can be realized."

MedQuist had previously announced that it is reviewing possible strategic alternatives.

MedQuist has headquarters in Mt. Laurel, N.J.

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