NEW YORK (CNNfn) - J.P. Morgan & Co. stock soared Wednesday, fueled by renewed speculation that the bank was in talks to be acquired, this time by Germany's Deutsche Bank.|
German financial weekly Wirtschafts Woche reported that Deutsche Bank is in talks to bring the New York-based J.P. Morgan into its fold.
A Deutsche Bank spokesman in Frankfurt, reached by CNNfn.com, declined comment on the report. A spokeswoman for J.P. Morgan said the company does not comment on market speculation.
Shares of J.P. Morgan (JPM: Research, Estimates) jumped $7.81, or nearly 5 percent, to $167.75 in Wednesday trading. The stock reached a peak of $172 earlier in the day and has now climbed nearly 13 percent since rival Credit Suisse First Boston's purchased Donaldson, Lufkin & Jenrette for $11.5 billion last week.
Analysts disagreed over the intrinsic value of a Deutsche Bank/J.P. Morgan union, although few disputed the New York investment bank is now in play.
"[The deal] is probably one that is not appealing to J.P. Morgan management, becoming a small piece of a big company," said David Berry, analyst with Keefe Bruyette & Woods.
"What it is that makes Morgan Morgan would disappear," Berry said.
But Berry added that Deutsche could and probably would pay the full value demanded by J.P. Morgan.
Andrew Collins, banking analyst with ING Barings, said over the past few years J.P. Morgan has become more open to selling at the right price. (293K WAV or 293K AIFF)
Bernstein analyst Ron Mandle said the deal could be a good fit, expanding J.P. Morgan's presence in the United States and Europe, if the bank managed to keep its people, and would certainly be good for Deutsche Bank shareholders.
Diane Glossman, analyst with UBS Warburg, said the banks still have room to fit and noted a number of complementary aspects in Europe. Glossman said there is also room for J.P. Morgan to be accretive to Deutsche.
J.P. Morgan topped many analysts' lists as the next bank to be gobbled up by a financial institution after Credit Suisse First Boston's purchase of DLJ (DLJ: Research, Estimates), announced Aug. 30, and UBS' $12 billion acquisition of PaineWebber announced in July.
Analysts' reports from both Merrill Lynch and Sanford Bernstein said J.P. Morgan was the most attractive takeover target, with the Sanford Bernstein analyst listing Chase Manhattan Corp. (CMB: Research, Estimates) as a likely partner.
"Chase has the customers and Morgan has the products," Mandle agreed.
Glossman said Chase doesn't have the same strength in Europe as Deutsche, but there would be fewer overlaps with J.P. Morgan, and Chase has a history executing big transactions extremely well.