American Express Acquisition Rumors Drive Stock Up

American Express Co. shares rose 4.8 percent, fueled by renewed speculation of an imminent acquisition by Citicorp, traders and analysts said.

Shares of the travel and financial services company rose as much as 5 in midday trading before closing at 76-5/8, up 3-1/2. It was the third time since December the market reacted to talk that American Express may be sold.

“The market is rampant with speculation,” said Lehman Brothers analyst Thomas Facciola, who played down the talk. “The market wants to believe these takeover rumors. There’s been a lot of acquisitions and mergers, so it’s more believable.”

Michael O’Neill, an American Express spokeswoman, declined to comment, saying the company doesn’t respond to speculation or share movement. Citicorp spokesman Richard Howe also declined comment.

Other analysts discounted the speculation. “I don’t place any more credence on the talk now than I did then,” said Moshe A. Orenbuch, senior research analyst at Sanford C. Bernstein & Co. “At their current price level, it’s hard to imagine that any U.S. financial company could afford it.”

American Express would be a massive acquisition even for Citicorp, which has the largest market value of any U.S. bank. The travel company has a market value of $36.62 billion, lower than Citicorp’s $54.68 billion.

Citicorp shares, which fell as much as 3-1/2, rebounded to close at 120-3/8, an increase of 1-3/8.

In December, merger talks between American Express and Citicorp, the second-largest U.S. bank with $281 billion in assets, fell apart because the two sides couldn’t overcome several obstacles. These included a price for American Express shares, how Citicorp, a major issuer of Visa and MasterCard credit cards would handle the American Express charge card and the role American Express chairman Harvey Golub would play in the combined company.

Later that month, American Express shares jumped again when traders said General Electric Co. also was a potential buyer.

Some of the stocks that moved substantially or traded heavily Friday on the New York Stock Exchange and the Nasdaq Stock Market:

NYSE

Advest rose 5-1/8 to 23-1/4.

Business Week magazine reported that two Boston banks were considering a takeover of the Hartford, Conn., brokerage firm. The magazine said the buyout figure could reach 2-1/2 times Advest’s estimated book value of $14 a share.

Philip Morris, rose 1-3/4 to 46-1/4.

RJR Nabisco rose 1/2 to 34.50

The nation’s top public health groups are signaling that a pending settlement with tobacco companies may prove lifesaving enough to support. Tobacco chief executive officers held an unusual meeting in New York to discuss details of a proposed pact.

Dupont rose 1-1/8 to 58-7/8.

As the Wilmington, Del.-based chemical giant’s stock split 2-for-1 Friday, Morgan Stanley upgraded its rating for the company. The analyst cited a strong earnings outlook in the company’s life sciences products expected to push 1999 profits over $9 a share, the Dow Jones News Service reported.

NASDAQ

ESS Technology fell 2 to 12-5/8.

Stock analyst Hambrecht & Quist downgraded ESS stock from “strong buy” to “buy.” ESS designs, makes and sells mixed signal semiconductor audio solutions for use by multimedia desktop and notebook computer manufacturers.

Microsoft rose 2-7/8 to 129-5/8.

The Redmond, Wash.-based software giant acquired Cooper & Peters, a Colorado developer of user-interface technology, the Dow Jones News Service reported. Microsoft said it expects the acquisition to speed up acceptance of the Microsoft technology developers use to create some applications.