Sometimes rumors are too good an idea to ignore, especially when it comes to bank acquisitions, “ Mad Money ” host Jim Cramer said Tuesday.
On Twitter , there has been recent talk that Regions Financialcould be a buyout target and that Spanish bank BBVA might be unloading Compass.
“I don’t know if Regions is for sale. I don’t like the bank and think it’s a second tier player. But BBVA’s Compass bank is a jewel and BBVA desperately needs the money,” Cramer said.
“This deal would not shock me and, for once, I think the acquirer’s stock would go higher. There are consequences, positive consequences, of the increase in housing prices along with the dearth of new housing, and one of them might be a sweet deal for Compass. It makes too much sense not to happen.”
Cramer noted that bank mergers were commonplace in the United States, initiated either by financial institutions looking to expand or ones that needed to step up their game. Sometimes regional banks eyed a national presence, while others were simply looking to fend off competition on their home turf.
“And you had banks that seized the moment when they could buy assets for less than they were worth, or as we’d put it in bank talk, less than tangible book,” he added.Page 1 of 3 | Next Page