chase buys h&q... does that put them out of the running as a mer suitor?
By Emily Church, CBS MarketWatch
Last Update: 8:40 AM ET Sep 28, 1999 NewsWatch
NEW YORK (CBS.MW) -- Chase Manhattan on Tuesday finally made its move into equity underwriting by buying Hambrecht & Quist in a cash deal valued at $1.35 billion or $50 per H&Q share for a 22-percent premium.
Today on CBS MarketWatch
European stocks slide Tuesday
CMGI tops estimate with $4.74-a-share net
Screaming Sector: Gold stocks soar
Merrill: Not planning to buy its way online
Nike locates an e-partner in the Fog
More top stories...
CBS MarketWatch Columns
Updated:
9/28/99 9:03:16 AM ET
The big New York bank (CMB: news, msgs) had long been looking to shore up its investment banking position, and was seen trying to strike a deal with Merrill Lynch (MER: news, msgs) for well over a year.
Now, with the San Francisco bank (HQ: news, msgs) under its belt, Chase can move into the fastest growing sector of banking where Internet, telecommunications and media deals are being cobbled and brought to the public market.
"Everyone's been looking for Chase to do an acquisition for a long time, from Merrill on down the line. It makes a lot of sense," said Jim Nelson, chair of the Orbitex Mutual Funds Trust, who also runs a venture capital fund. H&Q "is positioned in a good place for them, they're squarely in the middle of the market" for investment banking deals.
Shares of H&Q rallied 7 15/16 to 49 in pre-market trading and Chase's stock fell 2 1/8 to 72, after seeing earlier gains. See Indications
The companies expect the deal will close at the end of the year. Chase had been building its own investment unit, but long-time industry executives like Nelson note that it's hard to attract bankers to a new venture. H&Q "has a good reputation for this sector."
Chase's chief executive William B.Harrison, Jr.said in a release that the acquisition "is an important strategic move for Chase," said "Our goal is to offer the right financial relationships for companies in the new economy---from venture capital stage to IPO to mature company."
Hambrecht CEO Daniel H. Case III will become chairman and chief executive of Chase Securities West and head of Chase's Global Technology Group.
As a part of the purchase contract, Chase said it will establish a $200 million retention pool in Chase stock, payable over four year to keep H&Q bankers in the fold.
Under the agreement, Chase will begin a tender offer for H&Q shares over the next week.
Emily Church is the New York bureau chief for CBS MarketWatch.
Printer friendly format Refer this article to a
|
