Reports: Wachovia, Morgan Stanley mull merger
Morgan Stanley is considering a merger with Wachovia Corp., according to The New York Times and The Wall Street Journal. The newspapers cite individuals briefed on the matter.
Wachovia is Central Florida’s third-largest bank, with $4.8 billion in deposits, 63 branches and market share of 15.51 percent.
According to the Times, Morgan Stanley Chief Executive John Mack received a phone call from Wachovia (NYSE: WB) expressing interest in the bank.
A Wachovia spokeswoman said, “It is our policy not to comment on market rumors or merger speculation.”
The talks are preliminary, the newspapers say, and no deal may emerge. Morgan Stanley is considering other options as well, the newspapers report, and other banks have expressed interest in the company.
Morgan Stanley’s (NYSE: MS) stock, which has traded between $23.21 and $69.87 over the last year, closed Wednesday at $21.75 per share.
On Wednesday morning, a Morgan Stanley spokeswoman told The Wall Street Journal the investment bank wasn’t in merger talks.
But in an interview Tuesday night, Chief Financial Officer Colm Kelleher had told the newspaper, “We have to be adaptable. If the market fully decides that you need deposits, then it’s decided.”
Wachovia, with its dominant Eastern franchise, is seen as a promising merger partner for a company with big banking ambitions.
Trading in the bank’s stock Monday fueled sales talk as Wachovia saw its shares decline 25 percent to $10.71 payday loan online. The stock price rose Tuesday to close at $11.51, but the bank’s shares closed at $9.12 Wednesday, the same day the Dow Jones Industrial Average fell 4 percent.
Charlotte, N.C.-based Wachovia’s stock has traded between $7.80 and $53.10 per share over the last year.
Wells Fargo & Co. (NYSE: WFC) has long been viewed as a potential merger partner, given the San Francisco bank’s dominance in the West.
But Morgan Stanley as well as Goldman Sachs Group Inc. (NYSE: GS) might find themselves seeking to combine with a commercial bank, especially following this week’s proposed $50 billion buyout of Merrill Lynch & Co. Inc. (NYSE: MER) by Charlotte-based Bank of America Corp. (NYSE: BAC).
Perhaps investors took to heart comments made by new Wachovia Chief Executive Bob Steel on CNBC’s Mad Money show with Jim Cramer after the close of trading Monday. Cramer asked whether all the bank’s work is a way to prepare Wachovia to be sold.
“We have a great future as an independent company, but we’re a public company,” Steel said. “So we’re going to do what’s right for shareholders. I can promise you that. But we’re also focused on the very exciting prospects when we get things right going forward.”
Wachovia is Central Florida’s third-largest bank, with
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