smartmoney.com: Colin Devine at Solomon Smith Barney:To Err Is Human...
(…………now they tells us…………)
Colin Devine : To Err Is Human...
smartmoney.com
September 1, 2000 smartmoney.com.
The call: Colin Devine of Salomon Smith Barney wasn't too keen on the idea of AXA Financial (AXF),
which is majority owned by French conglomerate AXA (AXA), trading at a 50% price-to-book premium
compared with the U.S. life insurance group.
So on Aug. 16,
he downgraded the company's shares to Outperform from Buy .
He especially wasn't sold on the notion that AXA warranted the richer valuation
because of its 72% stake in American brokerage Donaldson Lufkin & Jenrette
(DLJ) — which Wall Street has seemingly always seen as a no-brainer of a take-out target.
"The company's shares, "wrote Devine, " "have recently benefited over speculation regarding the
sale of...Donaldson, Lufkin and Jenrette. We do not regard this as likely, as we believe that
DLJ's financial services group, which produces roughly one-third of its earnings, has evolved into a
core component of the overall AXF Group and central to AXF CEO Ed Miller's financial planning
oriented business strategy. If a DLJ sale were to occur, we would in fact anticipate a negative
re-valuation on AXF's shares back to their U.S. life peer group average."
The reality: Wrong...and wrong again.
In yet another surprising show of investment-bank lambada,
Credit Suisse Group, Switzerland's No. 2 bank, agreed on Wednesday to take DLJ off AXA's hands —
and pay it a spicy $13.7 billion for the trouble of having to dance alone.
DLJ will now link up with Credit Suisse's investment banking arm, CS First Boston
— a resounding response to No. 1 Swiss house UBS AG's (UBS) acquisition of PaineWebber (PWJ)
two months ago.
When all was said and done, shares of AXA Financial soared to $52,
a full 13% above where they stood when Devine downgraded the stock.
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Colin Devine:
Wrong on DLJ
and,
WRONG on CNC,
IMHO
cheers
TA |
