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Bove: $65 Offer for Northern Trust Would be a 'Gift'

Analyst Richard Bove says a merger between HSBC and Northern Trust would hit all the right chords.
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Northern Trust

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shares got a boost from reports that



may make a $65-a-share offer for the bank, an offer that Rochdale Securities analyst Richard Bove described as a "a gift."

Northern Trust's shares were up $2.12 at $50.12 on the rumors. HSBC shares were down 12 cents at $52.31.

Bove said he expects a more realistic price would be $58 a share, but added such a merger would be, "phenomenal." He explained that any merger would be positive for both banks.

"There would be no better company to serve these customers than Northern Trust, and HSBC would attract the customers," Bove said.

Like several asset and wealth management companies, Northern Trust has had difficulty providing returns to shareholders due to the lack of product diversity, Bove argued. He added that companies such as Northern Trust,

State Street

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Bank of New York

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are ripe for large banks to acquire.

"Banks can buy them and pay for the acquisition with the cash on their balance sheets and also pay off debt with the cash to increase shareholder returns," Bove explained.

--Written by Maria Woehr in New York.

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