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) --

Synovus Financial


(SNV) - Get Synovus Financial Corp. Report

reported plans to consider

exploring a sale or merger

may be challenging and will not likely translate into a premium for shareholders, according to analysts.

Synovus stock was down from $2.65 at the beginning of the week to $2.50 Thursday at close.

"The market's translation is that the buyers have put substantial marks on the loan portfolio," said Adam Barkstrom, managing director of equity research at Sterne Agee. "I think some

potential acquirers might be concerned about the loan portfolio, which means getting a deal done will be more of a challenge."

Barkstrom added that a bidder would likely take a markdown of 12 percent in any purchase, similar to the

Bank of Montreal

(BMO) - Get Bank of Montreal Report

acquisition of

TheStreet Recommends

Marshall & Ilsley Corp.

( MI).

In addition, any buyer would also have to pay back the back the $967.9 million in bailout funds Synovus received through the Troubled Assets Relief Program, or TARP.

Synovus has a price target of $2.60 a share, with normalized earnings power of 25 cents a share, according to Brian Foran, an analyst at Nomura. Foran estimates that the bank could sell for a valuation of $3 a share or 1.1 times tangible book, similar to the BMO and M&I tie-up.

Bidders for the bank could include

BB&T Corp.

(BBT) - Get BB&T Corporation Report


JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. Report


Iberiabank Corporation

(IBKC) - Get IBERIABANK Corporation Report


Toronto-Dominion Bank

(SNV) - Get Synovus Financial Corp. Report


Royal Bank of Canada

(RY) - Get Royal Bank of Canada Report

, according to analysts.

Barkstrom believes that strategically Synovus would fit with BB&T, but it may be weary of the tangible capital errosion any acquisition may bring.

"It was long rumored that


(STI) - Get SunTrust Banks, Inc. Report

would be great with JPMorgan, but they don't want to sell," said Barkstrom adding that there also may be regulatory objection to a JPMorgan/SunTrust merger. "Synovus is like a mini-SunTrust."

JPMorgan has acted as an advisor for Synovus in the past and CEO Jamie Dimon mentioned during the

bank's investor conference

that it may make opportune acquisitions.

The Canadian banks like RBC may have the most appetite for an acquisition, but the bank would have to endure a

negative reaction

from the marketplace that would be likely to follow, according to published reports.

Calls to Synovus for comment were not returned immediately returned.

--Written by Maria Woehr in New York.

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