Countrywide shares soar on BofA takeover talk

NEW YORK (CNNMoney.com) -- Shares of embattled mortgage lender Countrywide Financial Corp. surged in Thursday afternoon trade following a report that the company was in takeover talks with Bank of America Corp.

Countrywide (CFC, Fortune 500) shares soared 46 percent on the New York Stock Exchange.

Citing people familiar with the situation, The Wall Street Journal reported that Bank of America (BAC, Fortune 500) was in advanced talks to acquire Countrywide, noting that a deal could happen soon - but that it could also fall apart altogether.

A Bank of America spokesperson said the company did not comment on market rumors or speculation. Calls to Countrywide were not immediately returned.

The New York Stock Exchange contacted Countrywide asking the company to make a public statement as to whether there were any corporate developments, given the activity in its stock. Countrywide declined to comment.

Thursday's news marks the latest in the Countrywide saga.

Earlier this week, shares of the Calabasas, Calif.-based firm slipped to their lowest level since early 2000 following speculation it was planning to file for bankruptcy itself. Countrywide later denied the rumors.

Last last summer, the pair struck a deal in which Bank of America would provide $2 billion in financing to Countrywide in exchange for a stake in the company.

With Countrywide shares taking a beating, there has been talk about Bank of America buying the mortgage lender outright - although such a move could prove treacherous because of Countrywide's troubled loan portfolio.