Still, PaineWebber has stoutly defended its independence in recent years, even as Wall Street became increasingly skeptical of its future and the future of other second-tier U.S. A host of online brokerages such as e-Trade Group ( EGRP: Research, Estimates), Ameritrade ( AMTD: Research, Estimates), Datek and Suretrade have sparked a price war, providing trades in some cases for less than $10 per transaction. "Revenue has been under pressure as these Internet options become available," Leonard said. The merger comes at a time retail brokerages such as Merrill Lynch ( MER: Research, Estimates), PaineWebber and Morgan Stanley Dean Witter ( MOR: Research, Estimates) have come under increasing pressure from the emergence of Internet-related brokerages, which can tempt cost-conscious customers away from the blue-blood Wall Street firms. UBS' American depositary receipts (ADRs) fell 14-3/4 to 134. PaineWebber shares jumped 16-13/16, or more than 33 percent, to 66-3/4 in late morning trading Wednesday following the announcement. the main difference is that PaineWebber doesn't have an investment bank," Leonard said. "This doesn't make them a Merrill Lynch in the U.S. "I think it's an excellent strategic fit, the pricing is fair, and if you look at other institutional-retail combinations like Morgan Stanley Dean Witter, the synergies are there," said John Leonard, a London-based banking analyst at Salomon Smith Barney, who has an "outperform" rating on UBS shares. market it covets and the institutional knowledge it needs to handle the changing needs of wealthy European investors. Though a steep price, analysts largely hailed the deal, which gives UBS instant access to the U.S. UBS also will assume $4.3 billion in debt, but said the deal is expected to enhance its earnings per share by next year and generate financial synergies of $425 million per year by 2002. The price tag represents a premium of 47 percent over the company's closing price Tuesday of 49-15/16 and is a multiple of 18.1 times the company's estimated 2000 earnings. ![]() Terms of the deal call for the Swiss company to pay $73.50 per PaineWebber share, split evenly between cash and stock. "PaineWebber was without question the most attractive acquisition for us in developing a position in the U.S. "It was inevitable that UBS must come here" to the United States, said Marcel Ospel, UBS' chief executive officer. Total client assets will exceed $1 trillion. Approximately half of its private client business will be drawn from high net worth and affluent clients in the United States. ![]() ![]() The combined entity will rank as the world's top private banking organization with $422 billion in private client assets. brokerage firm, the merger will close the book on a prestigious 121-year run, which saw the company develop into to one of the nation's top independent brokers to deep-pocketed U.S. private banking operation to complement its investment bank UBS Warburg, and brings the firm significantly closer to its goal of becoming a global financial powerhouse.ĬNNfn's Susan Lisovicz reports on the proposed merger.įor PaineWebber ( PWJ: Research, Estimates), the No.4 U.S. The deal fills a gaping hole for UBS ( UBS: Research, Estimates), which has been on the prowl for a strong U.S. for about $10.8 billion in cash and stock. NEW YORK (CNNfn) - Switzerland's UBS AG, the third-largest bank in Europe, made its move to cash in on the well-heeled American investor Wednesday, agreeing to purchase U.S. investors, offers $10.8B for brokerage houseīy Staff Writers Tom Johnson and Jamey Keaten
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