Shares in British bank Barclays jumped in London today after Merrill Lynch said Bank of America could be about to launch a bid worth up to £60 billion.
A research report by Merrill Lynch analysts in New York and London said Bank of America was 'very interested' in buying Barclays in a deal which would create the largest bank in the world.
The report said Bank of America could pay a 25% to 30% premium on the 707p level at which Barclays shares closed on Thursday - implying a bid in the region of 920p a share or £60 billion. Barclays shares surged more than 3% today to close at 730p, valuing the bank at £47.4 billion.
Outgoing Barclays chairman Matt Barrett made the most of the speculation as he sold nearly 2.5 million shares and options for £6.5m. City rules dictate that Mr Barrett would not have been allowed to sell shares if talks with Bank of America were underway.
The Merrill Lynch report said a deal could be announced in the 'near term'. Currently the second-largest bank in the US, the move would allow Bank of America to move ahead of rival Citigroup. Barclays is the third largest bank in the UK. Both companies refused to comment today.
