BOSTON — Ira Stepanian has resigned as Bank of Boston Corp.'s chairman and chief executive, but his departure does not mean the bank is for sale, his successor, Charles K. Gifford, said Friday.
Stepanian's unexpected retirement was announced by the bank late Thursday. A bank spokesman refused to say whether scrapped merger attempts in the past several days with three separate suitors played a role.
"I talked to Ira yesterday [Thursday] and certainly he had no inclination or feeling at that point in time that he was going to be history," said James Moynihan, a bank analyst with Advest Inc. in Boston.
Bank of Boston shares jumped $2.125 to a record $43.75 on the New York Stock Exchange. Opening of trading of the bank's shares was initially delayed Friday on the news of Stepanian's departure.
Stepanian had a reputation for being difficult in negotiations with potential partners. The string of thwarted deals had reportedly strained his relationship with the bank's board.
Merger negotiations between Bank of Boston and CoreStates Financial Corp. of Philadelphia collapsed last Saturday after the banks had agreed in principle to a merger of equals that would have created the nation's 12th-largest bank.
The merger talks with CoreStates ended after details became known to investors who protested, saying the offer of $38 a share, or $4.2 billion, was too low for the 211-year-old institution.
The deal unraveled three days after Stepanian persuaded his board to reject a merger offer from Pittsburgh-based Mellon Bank Corp. Banc One Corp., based in Columbus, Ohio, also made a $5-billion offer but withdrew it Monday.
Moynihan said Stepanian, 58, probably did not willingly make the decision to retire. Reid Nagle, a banking analyst for SNL Securities in Charlottesville, Va., predicted earlier this week that Stepanian would be forced out.
"The bank has been put on notice that shareholders want to optimize the value of their investment," Nagle said after the collapse of the CoreStates deal. "Management is now under a lot of pressure to deliver."
Earlier this year, Bank of Boston discussed a merger with New Jersey's First Fidelity Bancorp and Fleet Financial Group, based in Providence, R.I., and Hartford, Conn.
Stepanian, the son of Armenian immigrants, is credited with bringing Bank of Boston from the brink of disaster during the 1980s to its current position as the 19th-largest bank in the United States.
He is highly regarded in the banking community for his leadership during the Latin American debt crisis, when the company's stock price hit a low of $3 per share.
"He has been looked at as an outstanding CEO of a major New England bank. It boggles my mind that this happened," Moynihan said, stopping short of linking the failed merger and Stepanian's retirement.
Stepanian issued a written statement saying, "After 32 years at Bank of Boston, I feel that it is time to move on and let others help direct this fine institution."
The bank's board elected Gifford, Bank of Boston president, as chairman and CEO, effective immediately.
Gifford, in a telephone interview Friday, said: "There is not a 'for sale' sign on the outside of our building.
"There has not been a change, from the board, of direction in terms of what we are going to do. We are going to build shareholder value in this company.
"We are going to be focused on how to do that. We are going to look at our options inside, wherever those options might be, but I can tell you there has not been a decision made."