Chicago merger off

Press, 13 June 1984, Page 32

Chicago merger off

NZPA-Reuter

First Chicago Bank says it should no longer be considered a possible merger partner for Continental Illinois.

“This decision was based on a comprehensive analysis of the benefits of a combination with Continental compared with the alternative of First Chicago continuing to implement its own basic strategies.” said First Chicago's chairman, Mr Barry Sullivan. Mr Sullivan said the analysis confirmed it was preferable for First Chicago to work independently towards its goal of being “the

premier bank holding company” in the midwest. Under Illinois law until now only First Chicago, other Illinois banks or foreign banks could bid for Continental Illinois, which had a run on deposits last month after rumours spread that it was having financial troubles. However, a State Senate committee has approved a Continental-backed legislative change that would allow non-Illinois US banks to bid for Continental. First Chicago opposed that measure and introduced a counter proposal that would allow Illinois banks to match any out-of-state bid

for Continental. Last week Illinois Senate sources said the two Chicago banks were negotiating a legislative compromise. The chairman of Continental Illinois, Mr David Taylor, responding to First Chicago's announcement said: “There would be some attractive aspects to a merger between Continental and First National Bank of Chicago.

“However, when all is said and done, the presence of two money centre banks in the city is probably best for the competitive environment and general health of the financial community."