Continental Waits at the Altar

Soon after Chicago's Continental Illinois Bank came close to collapsing last month, Wall Street matchmakers went to work trying to find it a strong partner. But after taking a close look at Continental's books, the potential suitors have been shying away. New York's Chemical Bank and First National Bank of Chicago both said last week that they were no longer interested in acquiring Continental. Uncertainty about the bank's future, said Continental Chairman David Taylor, has left "our employees hanging by their thumbs."

Chicago was abuzz, though, with speculation that a deal was in the works. In a front-page story, the Chicago Tribune claimed that Robert Abboud, president of Occidental Petroleum, and Drexel Burnham Lambert, a New York City investment banking firm, were putting together a group of investors to rescue Continental with a $2 billion infusion of capital. The story seemed plausible because Abboud was once chairman of First Chicago, Continental's crosstown competitor. He was abruptly fired in 1980, after his bank suffered an earnings slump.

Abboud admitted last week that he had advised Drexel Burnham Lambert on a possible investment in Continental but contended that he was not financially involved in the deal. Nonetheless, people who know the pugnacious Abboud say that he would love to get back into the big-money whirl of Chicago banking, especially if he could compete head on with the bank that sent him into corporate exile.