New England bankers call their business a contact sport. So it was when Shawmut National Chairman Joel Alvord offered to sell his bank to rival Fleet Financial Group--announcing a $3.7 billion deal just two weeks later, on Feb. 21.
Alvord had little choice: Shawmut's finances were weak, speculators were buying stock and pushing for a sale, rivals were itching to bid. "If word got out he was ready to sell, there would have been a feeding frenzy," says a banker involved in the deal.
At the same time, Alvord staged a power play on his other nemesis, Bank of Boston. For one year, Bank of Boston had been secretly negotiating a merger with Fleet, say sources close to the talks. Such a deal would have forced Shawmut to find a buyer outside of New England, likely for less money than Fleet could offer.
Now, Bank of Boston itself will have to look beyond the region if it wants to grow. And Alvord's end run makes him chairman of New England's largest bank. But not for long: Under terms of the deal, he's out of a job in three years.