Word: citicorp
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Dates: during 1980-1989
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Walter Wriston, former chairman of Citicorp, the largest U.S. bank, observes, "I have great trouble in knowing the difference between insider information and a very fine research report." On Wall Street, says an SEC official, "knowledge is power is money. It's worth a fortune." Deciding whether that fortune is ill gotten is one of the regulators' most forbidding tasks...
BankAmerica spent last week dodging a $3.4 billion merger bid by First Interstate Bancorp and an informal takeover offer from Citicorp. But the beleaguered San Francisco company realizes that its shareholders will scream foul unless it does something to rescue its foundering finances (more than $1 billion in losses in the past six quarters). To raise cash, BankAmerica has decided to consider selling one of its crown jewels, the highly profitable Charles Schwab discount-brokerage subsidiary. The most probable buyer is none other than Charles Schwab, the company's founder, who sold out to BankAmerica in 1983 for $52 million...
...almost $1 billion in losses in the past five quarters at BankAmerica. He also faces the unwelcome challenge of a more than $2 billion merger offer from Los Angeles-based First Interstate Bancorp (assets: $50 billion). Last week a new possibility was reported by the Wall Street Journal: Citicorp, the largest U.S. banking institution, with assets of $176 billion, was also pondering ways to acquire BankAmerica...
More intriguing was the notion that mighty Citicorp was studying ways to acquire all or part of BankAmerica. Until a new California law takes effect in 1991, an outright buyout of BankAmerica by the New York institution is impossible. Federal bank regulators would also have to approve the move. Just as important, it hardly seemed likely that Tom Clausen had come out of retirement merely to preside over the sale of the empire that he did so much to build...
Little Bang has also made London a special attraction for commercial banks. Britain has no equivalent of the U.S.'s Glass-Steagall Act, which prohibits % commercial banks from underwriting stocks and bonds as investment bankers do. Thus such institutions as Citicorp, the Union Bank of Switzerland and the Hongkong and Shanghai Bank have flocked to London seeking brokerage partners. In all, 64 of the Exchange's 200 brokers and jobbers have now been acquired by larger foreign or domestic firms, or have merged in self-defense...