* Deal offers a 74 pct premium
* Stifel expects $62 mln in savings
* Stifel shares down 4.4 pct, Thomas Weisel up 65 pct
(Adds details from conference call)
April 26 Stifel Financial Corp (SF.N), known
for its research services, will buy smaller rival Thomas Weisel
Partners Group Inc TWPG.O for about $300 million in stock to
strengthen its middle-market investment banking business.
Each Thomas Weisel share will be exchanged for 0.1364
shares of Stifel. Based on Stifel's Friday close of $55.74, the
deal values Thomas Weisel at $7.60, a premium of 74 percent
over the stock's last close.
Loss-making Thomas Weisel currently trades at 1.1 times its
book value -- or the value based on the company's assets minus
liabilities -- and trails the sector average of 2.89 times,
according to Reuters data.
St. Louis-based Stifel, which has made seven small
brokerage purchases since 2000, has been looking to add to its
investment banking and capital markets businesses, while it
also builds out a commercial bank to support clients.
The parent of Stifel Nicolaus & Co is one of several
smaller securities firms that thrived in the wake of the Bear
Stearns and Lehman Brothers collapses and the takeover of
industry giant Merrill Lynch by Bank of America (BAC.N).
As of Dec. 31, the company's shareholders' equity was
"One of our strategic goals is to grow investment banking
and expand our institutional equity business domestically and
internationally. And this deal does this," Ronald Kruszewski,
chief executive of Stifel, said on a call with analysts.
The company expects Thomas Weisel's platforms to add to its
investment banking, particularly in technology, healthcare,
mining and energy.
Kruszewski will continue to head Stifel Financial. Thomas
Weisel, CEO of Thomas Weisel, will become co-chairman, along
San Francisco-based Thomas Weisel will be merged into a
unit of Stifel and become its wholly owned subsidiary, the
company said in a statement.
The transaction is expected to close on or about June 30,
generate savings of about $62 million for Stifel Financial and
add to its earnings.
Stifel was advised by its own wholly owned unit Stifel,
Nicolaus & Co, Inc, and Thomas Weisel Partners was advised by
its wholly owned subsidiary Thomas Weisel Partners LLC.
Shares of Stifel Financial were trading down 4.4 percent at
$53.26 on the New York Stock Exchange, while those of Thomas
Weisel were trading up 65 percent at $7.19 on Nasdaq.
(Reporting by Sweta Singh in Bangalore; Editing by Maju