Report: Raymond James Close to Morgan Keegan Buy
Raymond James Financial (NYSE:RJF) is close to reaching a deal to buy brokerage Morgan Keegan from Regions Financial (NYSE:RF) in a deal that is expected to improve its ability to manage securities for customers, according to a report by Reuters.
Raymond James became the most likely bidder after second bidder, Stifel Financial (NYSE:SF), dropped its offer price below $1 billion, citing fears that brokers would leave after the purchase closed, according to the report citing people close to the matter.
Analysts have pegged Morgan Keegan’s value at about $1.2 billion, including a $250 million cash dividend that the brokerage will pay to Regions prior to a sale.
Regions bought the company in 2001 for $789 million and has been trying to sell it since this summer to try and make enough money to repay $3.5 billion in bailout aid it owes to the government.
Final terms of the deal were being negotiated as of late Monday, with a sale expected to be announced this week, the sources told Reuters. There’s no guarantee a deal will be reached.
Raymond James would see its regional brokerage business bolstered with a Morgan Keegan acquisition, adding some 1,200 advisors to its already robust 5,400 workforce.