Post by fastwalker on Aug 31, 2004 21:44:33 GMT -5
:)FYI..INFORMATIONAL ONLY...refer to other Schwab posts..for significance..
news.moneycentral.msn.com/ticker/article.asp?Feed=AP&Date=20040831&ID=3944456&Symbol=US:SCH
Content:
Swiss Banking Giant UBS Buying Schwab Unit
August 31, 2004 08:49 AM ET
ZURICH, Switzerland (AP) - Swiss banking giant UBS AG announced Tuesday it is buying the capital markets division of discount brokerage Charles Schwab Corp. in a $265 million bid to become one of the top traders on the NASDAQ exchange.
The bank said it would pay cash for the SoundView unit in the deal, which it said it expected to close by the end of this year, subject to regulatory approval.
"This transaction is consistent with our organic growth plan in combination with targeted acquisitions to ensure the growth of our franchises," said John Costas, chairman and chief executive of UBS Investment Bank.
UBS said it would integrate the operations in the equities business of its investment bank.
"This will propel UBS to a leading position as a top trader of NASDAQ securities globally and further our goal of becoming a premier provider of services to private clients around the world," Costas said.
Schwab is expected to return to focusing on individual "retail" investors after a string of poor earnings reports led to the resignation of chief executive David Pottruck in July.
Charles Schwab, who has returned as chairman and chief executive, said a lack of synergy between the unit and the company's core businesses "given the current market environment" was a reason for the sale.
"In addition to improving our overall profit margin and return on equity, our exit from capital markets reinforces our strategic focus on individual investors and independent financial advisors," Schwab said.
SoundView has changed hands frequently, growing out of research firm Gartner Group in the 1980s. In 1999, it was acquired by Wit Capital Group, a company that provided direct electronic access to initial public offerings and other securities.
The unit is valued for its access to over-the-counter stocks.
The Wall Street Journal, anticipating the sale Monday, said UBS will significantly cut back the research operation.
In a statement released in San Francisco, Schwab said it expects to incur a third-quarter noncash charge of about $70 million to $80 million as a result of the sale. The U.S. broker is selling the business less than a year after buying it for $321 million.
Schwab also said it anticipates additional charges of up to $85 million for exiting its institutional research operations in the near future.
Analysts welcomed the deal as a sensible addition for UBS.
The bank's share prices were down 1.4 percent at 85.70 Swiss francs (US$66.98; 55.5 in afternoon trading on the Zurich exchange.
© 2004 AP
;D
news.moneycentral.msn.com/ticker/article.asp?Feed=AP&Date=20040831&ID=3944456&Symbol=US:SCH
Content:
Swiss Banking Giant UBS Buying Schwab Unit
August 31, 2004 08:49 AM ET
ZURICH, Switzerland (AP) - Swiss banking giant UBS AG announced Tuesday it is buying the capital markets division of discount brokerage Charles Schwab Corp. in a $265 million bid to become one of the top traders on the NASDAQ exchange.
The bank said it would pay cash for the SoundView unit in the deal, which it said it expected to close by the end of this year, subject to regulatory approval.
"This transaction is consistent with our organic growth plan in combination with targeted acquisitions to ensure the growth of our franchises," said John Costas, chairman and chief executive of UBS Investment Bank.
UBS said it would integrate the operations in the equities business of its investment bank.
"This will propel UBS to a leading position as a top trader of NASDAQ securities globally and further our goal of becoming a premier provider of services to private clients around the world," Costas said.
Schwab is expected to return to focusing on individual "retail" investors after a string of poor earnings reports led to the resignation of chief executive David Pottruck in July.
Charles Schwab, who has returned as chairman and chief executive, said a lack of synergy between the unit and the company's core businesses "given the current market environment" was a reason for the sale.
"In addition to improving our overall profit margin and return on equity, our exit from capital markets reinforces our strategic focus on individual investors and independent financial advisors," Schwab said.
SoundView has changed hands frequently, growing out of research firm Gartner Group in the 1980s. In 1999, it was acquired by Wit Capital Group, a company that provided direct electronic access to initial public offerings and other securities.
The unit is valued for its access to over-the-counter stocks.
The Wall Street Journal, anticipating the sale Monday, said UBS will significantly cut back the research operation.
In a statement released in San Francisco, Schwab said it expects to incur a third-quarter noncash charge of about $70 million to $80 million as a result of the sale. The U.S. broker is selling the business less than a year after buying it for $321 million.
Schwab also said it anticipates additional charges of up to $85 million for exiting its institutional research operations in the near future.
Analysts welcomed the deal as a sensible addition for UBS.
The bank's share prices were down 1.4 percent at 85.70 Swiss francs (US$66.98; 55.5 in afternoon trading on the Zurich exchange.
© 2004 AP
;D