SAN FRANCISCO — BankAmerica officials Wednesday denied persistent rumors that the troubled company is engaged in talks that might lead to its takeover by Los Angeles-based First Interstate Bancorp or by one of two Japanese banks, Dai-Ichi Kangyo or Sanwa.
A variation of the rumors had First Interstate and Dai-Ichi teaming up to acquire BankAmerica, parent of Bank of America, and dividing it between them.
But "nothing is going on, as far as I know," said a ranking BankAmerica officer who is in a position to know.
Another BankAmerica official, spokesman John Keane, said the company "has had no discussions" with either First Interstate or a Japanese bank. Dai-Ichi and Sanwa also denied the rumors, according to the AP-Dow Jones news service.
First Interstate, whose expansionist chairman, Joseph J. Pinola, has made no secret of his desire to acquire BankAmerica, has "nothing going on with Dai-Ichi," said Paul Minch, First Interstate senior vice president for public relations.
Overture in March
Minch declined to comment when asked whether First Interstate is considering a solo bid for BankAmerica. BankAmerica President Samuel H. Armacost turned aside an informal overture from Pinola in March.
Speculation that BankAmerica might be forced to seek a merger partner intensified last month after the company reported a second-quarter loss of $640 million. The loss sliced BankAmerica's common stockholders' equity to $3.26 billion, or 2.78% of assets--about half the percentage of other major banking concerns.
The equity account could be replenished through a stock offering, the sale of assets or a combination of the two. Some sources on Wall Street believe that a change in top management might be required for BankAmerica to receive an acceptable price in a stock offering.
Stockholders' equity could also be boosted through an infusion of new capital from an acquirer.
Investment banking sources on Wall Street said they doubt that a Japanese bank would want to become involved with Bank of America, whose troubled loan portfolio may still contain further unpleasant surprises.
"That isn't the Japanese style. They are very risk-averse," said a mergers and acquisitions specialist with a leading New York firm.