Raymond James Financial to acquire Morgan Keegan for $930 mn
12 Jan 2012
Raymond James Financial Inc yesterday agreed to acquire Southeast investment bank and brokerage firm Morgan Keegan from Regions Financial Corp, in a $930-million stock deal that will combine two of the US Southeast's biggest brokerages.
The merger will create one of the largest full-service wealth management and investment banking firms outside Wall Street.
The long-drawn auction ended speculations on potential job cuts and deal financing, and came only after Raymond James submitted a firm offer that valued the brokerage between $900 million and $1 billion.
Morgan Keegan, one of the leading underwriters of municipal bonds in the US, will also pay Regions a special dividend of $250 million before closing the deal, which will value the entire transaction at $1.18 billion.
According to some media reports, Regions hurried through the final process of the auction since there were rumours that some of the 1,200 financial advisers of Morgan Keegan were keen on leaving the firm.
Whether they will stay following the deal will depend on the retention packages offered by Raymond James.