State Street in Custody Battle

Atticus recently scored large gains from several of its major investments this year, including Phelps Dodge(PD), which recently got a takeout offer from Freeport-McMoRan's(FCX). Atticus has a 10% equity stake in the copper miner.

Atticus also has profited from large run-ups in shares of the New York Stock Exchange(NYX) and MasterCard(MA).

Atticus did not return a request for comment.

One thing that makes State Street particularly attractive to a potential buyer is the fact that approximately 41% of its revenue comes from international business and it is much more than a domestic player.

A State Street spokeswoman says the company is always looking for strategic acquisitions but she would not comment on any particular deal. A Northern Trust spokesman, meanwhile, said the bank was committed to remaining independent.

Jason Tyler, a senior vice president of portfolio management at Ariel Capital Management says it is not imperative that Northern sell itself, but it's not out of the question.

"Northern now all of a sudden has some nice scarcity value," says Tyler, whose firm owns 4.7 million shars of Northern Trust. In regards to a deal with State Street, "I just hope they don't race to do something unless there is a big premium attached to it."

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