First Union to Purchase Signet Banking

First Union Corp. said it agreed to buy Signet Banking Corp. for $3.13 billion. The bank offered to pay 3.46 times book value for Signet, which would make it one of the most expensive bank acquisitions ever. “They probably paid at least 10% more than it was worth,” said Anthony Gray, a money manager at STI Capital, which owns 534,150 First Union shares. Still, the price may be justified because “if you want to play in that market, you’ve got to do it now,” he said. Charlotte, N.C.-based First Union is the sixth-largest U.S. bank, with $143 billion in assets and about 2,000 offices on the East Coast. Shares of Richmond, Va.-based Signet surged $13.50 to close at $50.19. First Union shares fell $3 to close at $94.44. Both trade on the New York Stock Exchange.