Tech bankroller H&Q acquired by Chase
Chase (NYSE:CMB) is a leading corporate lender but has expressed a desire to round out its equities business by bolstering its investment bank. With this aim, the bank held unsuccessful talks with top brokerage firm Merrill Lynch and Co. Inc. last year.
Hambrecht & Quist's stock price closed at 41-1/16 on Monday, then jumped to 49 in pre-open trading on Tuesday. Chase's shares finished at 74-2/16, but were quiet before the opening bell.
Extends Chase's investment base
"The acquisition of Hambrecht & Quist is an important
strategic move for Chase," William Harrison Jr., Chase's
president and chief executive, said in a statement. "It extends
Chase's one-stop investment banking range of products in the
highest growth sectors of the U.S. economy, where media,
telecommunications, information technology and the Internet
converge."
Hambrecht & Quist, whose recent third-quarter profits rose 167 percent to $37.1 million, began in 1968 and has since helped take public such high-flying tech companies as Amazon.com Inc. Nasdaq:AMZN), Netscape Communications (NYSE:AOL) and Apple Computer Inc. (Nasdaq:AAPL). In this deal, it would assume the Chase name and remain based in San Francisco.
Operationally, it would join Chase's investment banking arm, run by James Lee. Daniel Case III, chairman and CEO of Hambrecht & Quist, would become chairman and CEO of Chase Securities West and head of Chase's global technology group, the companies said.
As part of the deal, Chase would set up a $200 million retention pool of its own stock, payable over four years, to keep key Hambrecht & Quist employees. The retention of top investment bankers is vital in an acquisition, because the business thrives on these bankers' personal relationships with companies.
The agreement has been approved by the boards of both companies and is expected to be completed by the end of this year.