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Robert Trigaux

Will Raymond James buy Morgan Keegan brokerage firm?



raymondjameslogo.gifWake up and good morning. Looks like St. Petersburg's Raymond James Financial is looking to put a hefty gift under its tree if it is able to win the bidding for the Morgan Keegan brokerage now owned by Alabama's Regions Financial Corp.

morgankeeganlogo.gifReports from Bloomberg News here and Reuters here say Raymond James is competing against the likes of the Stifel Financial brokerage firm for Morgan Keegan. Reports Bloomberg: "A period of exclusive negotiations with Stifel, based in St. Louis, has expired, allowing Raymond James to revive discussions, said two of the people, who spoke on condition of anonymity as the matter is private. Neither is likely to reach a deal for Memphis, Tennessee-based Morgan Keegan before the end of the year, the people said."

Last month, Regions Financial dropped negotiations with two groups of private equity firms and held exclusive talks with Stifel Financial to sell Morgan Keegan but those talks are now over, giving Raymond James an opportunity.

But it's an uphill opportunity. Consider this past Sunday's headline from the Memphis newspaper, The Commercial Appeal, about its hometown Morgan Keegan: Financial crisis, lingering issues plague sale of Morgan Keegan. Reports that paper's story: "Regions Financial Corp., the owner, sought a sale to get cash to pay down its own federal bailout loans. It also wanted enough money, analysts say, to help offset the legal cost of fighting investors riled by Morgan Keegan's failed mutual funds. Stifel Financial Corp. of St. Louis apparently considered a buyout earlier this month of Morgan Keegan, industry experts say, but balked at the $1 billion price." Here's the complete story.

The same story notes that Morgan Keegan's mutual fund problems have spawned two class-action lawsuits by investors claiming about $1.5 billion in losses are pending along with dozens of arbitration hearings. "Regions, the nation's 21st largest bank, has earmarked $300 million for legal costs. In the event Morgan Keegan were sold, analysts suggest, the bank would most take responsibility for the legal bills exceeding $300 million," the story states.

Here's a more in-depth piece from the Commercial Appeal on how Morgan Keegan lost so much on its mutual funds. It's not pretty.

No comment yet from Raymond James on these reports.

-- Robert Trigaux, Business Columnist, St. Petersburg Times, soon to be known as the Tampa Bay Times


[Last modified: Thursday, December 22, 2011 8:00am]


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