J.P. Morgan Chase & Co. couldn't have found a better environment to make deals. With the subprime credit crisis hampering stock valuations of banks, J.P. Morgan chief Jamie Dimon has had a field day with the proposed acquisition of Bear Stearns Cos. at a bargain price of $10 per share and nearly half the credit card portfolio of Target Inc. Now, Dimon reportedly told shareholders he wants to beef up the firm's consumer banking business in Washington and the South. So, what is on the radar screen for Dimon?
Continue reading below
The news immediately renewed talk of a J.P. Morgan purchase of SunTrust Bank Inc. of Atlanta. We last heard this rumor in a January Wall Street Journal story, which also listed Washington Mutual Inc. as another of Dimon's targets. A Reuters story about Dimon's comments at the shareholder meeting not only highlighted the aforementioned banks, but also PNC Financial Services Inc. of Pittsburgh. Both SunTrust, which has a strong presence in Georgia and Florida, and PNC, which has a strong presence in Washington and would offer a bridge between J.P. Morgan's New York home and its Midwest outpost from its Bank One purchase, clearly make sense.
But considering Dimon's bold moves as of late, maybe J.P. Morgan is thinking bigger like Charlotte, N.C.-based Wachovia Corp., which has been looking to shore up its capital reserves after announcing a $708 million loss attributed to investments in mortgages and hedge fund Falcon Strategies. Wachovia has a strong presence not only in the South, but much of the East Coast, making it an ideal target for J.P. Morgan to strengthen its consumer banking franchise. Despite Wachovia's troubles, however, it may remain too rich even for Dimon. - Gerald Magpily
See Reuters: J.P. Morgan CEO says seeks U.S. South presence
See TheDeal.com: J.P. Morgan buys stake in Target cards
See TheDeal.com: J.P. Morgan to buy Bear Stearns
See Dealwatch: J.P. Morgan-Bear Stearns merger
