Fueled by reports of a change in the plan to sell its credit-card operation, MNC Financial Inc.'s stock reversed its recent form yesterday and made a strong move on the upside.
The stock rose by 87 1/2 cents, to $2.75 a share, a jump of 46 percent and the highest percentage gain of any stock traded on the New York Stock Exchange. More than 1.2 million shares were traded.At midday today MNC was $2.371/2, down 371/2 cents.
MNC is the parent company of Maryland National Bank and American Security Bank in Washington.
The increase came a day after the stock had sunk to $1.87 1/2 . Analysts said the drop was caused by concerns about how the bank holding company will pay debts coming due next week and the fallout from the government takeover of the Bank of New England on Sunday.
Yesterday's rise was attributed in large part to reports in the Washington Post and American Banker, a banking trade newspaper, that MNC chairman Alfred Lerner will seek approval to buy a substantial portion of MNC'S credit card operation, MBNA Corp., if it is spun off as a publicly traded company.
Both reports cited unidentified sources who said MNC was preparing an amended filing with the Securities and Exchange Commission that would reveal Lerner's intentions. The American Banker article said the amended registration statement was to be filed yesterday or today. No MNC filing was made with the SEC yesterday.
American Banker said Lerner and his Cleveland-based insurance company, Progressive Insurance Co., had agreed to buy 15 percent of the stock of MBNA. The Post article said the Lerner and Progressive planned to buy 30 percent.
MNC spokesman Daniel Finney declined to comment on the reports. "We're pursuing many initiatives, all directed at enabling us to meet our debt obligations for next week and beyond," he said.
MNC has been trying to sell MBNA since October as a way of raising capital for the cash-strapped bank-holding company. About a month ago the company filed a registration statement with the SEC for a public offering of MBNA. Such an offering could raise more than $1 billion.
On Monday, MNC is due to pay $375 million on a loan from a syndicate of banks headed by Morgan Guaranty Trust Co. of New York. The next day the bank has to repay $271 million in notes.
The recently completed sale of Landmark Financial Services Inc., the MNC subsidiary, to Commercial Credit for about $369 million will cover only one of the debts.