Once again, Philadelphia-based bank Sovereign Bancorp is in the news again stoking deal rumors. Sovereign CEO Jay Sidhu told reporters that he plans to eventually sell the bank should leading shareholder Banco Santander Central Hispano not exercise its option to buy the bank that serves most of the Northeast and mid-Atlantic. The statement comes only months after Sovereign and BSCH completed the controversial deal that gives the Spanish bank the option to buy the 75% of Sovereign it doesn't already own in 2008 at $40 a share. After 2008, BSCH will still have a two-year window to buy Sovereign, but at market value. The BSCH deal upset shareholders and politicians. Sidhu said that Sovereign is the last option for larger banks to enter the New England market. Considering Bank of America's presence in the region, New England is bound to attract interest from its rival Wachovia and maybe even Citibank. However, Sidhu's assertion that Sovereign is the last means to enter New England is not entirely accurate. Arguably, New England's other regional heavyweight Citizens Financial, a unit of Royal Bank of Scotland, is another opportunity. After all, at the right price, it is possible that RBS would sell.—Matthew Wurtzel
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