UnionBanCal Could See Higher Bid: Analysts

UnionBanCal hasn't been totally immune to the credit cycle and California housing market. Net income fell 14% last quarter to $141 million, or $1.02 a share. It took a $95 million provision in the quarter up 32% from the first quarter.

But at least one analyst says the bidding war that UnionBanCal has commenced is "a waste of time and money."

Ever-opinionated Richard Bove of Ladenburg Thalmann writes in a note that UnionBanCal "may have a point" when it argues that the Japanese bank should increase its offer given that "this stock may be worth well more than $63 per share in time." But it is "difficult to argue that it is worth much more than that at present."

The offer is "well above" valuations placed on other banks, he adds. "It is hard to argue the justification as to why Mitsubishi should pay more. Moreover, it is hard to understand why Mitsubishi should argue the point. It can call a meeting of the board and remove the special committee. It has 65% of the votes. It can accept its own bid for the same reason."

"Thus while an interesting battle may ensue, there is no likelihood of Mitsubishi losing," Bove says. "I suggest taking the profit from this offer now and going elsewhere."