Bank of America Affirms Plan to Acquire Countrywide

Bank of America Affirms Plan to Acquire Countrywide

May 5 (Bloomberg) -- Bank of America Corp., seeking to quell speculation that it will abandon its $4 billion purchase of Countrywide Financial Corp., said the takeover is proceeding as planned.

``The transaction is on track to close in the third quarter as agreed to,'' said Robert Stickler, a spokesman for Charlotte, North Carolina-based Bank of America, in a telephone interview today.

Countrywide, the largest U.S. mortgage lender, plunged in New York trading after Friedman, Billings, Ramsey Group Inc. analyst Paul Miller cut his rating and urged Bank of America to abandon the transaction. Miller changed his rating on Calabasas, California-based Countrywide to ``underperform'' from ``market perform'' and lowered his price target to $2 a share from $7.

``Countrywide stock is worth from zero to $2,'' Miller said on a Bloomberg TV interview. ``The deal will go through but at a much lower price.''

The lender trimmed its loss for the day to 62 cents, or 10 percent, to $5.36 in 4 p.m. New York Stock Exchange composite trading, after plunging as much as 17 percent. Bank of America lost 2.1 percent to $38.97.

Investors have speculated Bank of America may seek a lower price or cancel the deal because U.S. home prices and sales have deteriorated more since January, when the takeover was disclosed.

BLOOMBERG