Merger Stuns Hardened Wall Street Veterans

Wall Street veterans were floored by one of the biggest stories to hit their industry in a quarter of a century.

The size of it is so staggering that even the most hardened Wall Street professionals are going to be gagging over this one, said Thom Brown, a money manager at Rutherford Brown & Catherwood.

Its basically merger mania. Mergers are up, big-time, this year and this is just the icing on the cake, said Kenneth Ducey, vice president and director of trading at BT Brokerage, a subsidiary of Bankers Trust New York Corp.

Its the ultimate merger. What could top this? asked Ducey, who has been in the business for 35 years. This is just unbelievable.

 

Bill Meehan, chief market analyst at Cantor Fitzgerald, said the proposed merger was the biggest news in the financial services industry that he had seen in 25 years on Wall Street.

It was obviously quite a big surprise, Meehan said. These are two huge companies and what it means is that its going to put a lot of pressure on many of the other players in the financial service market... to do deals and bulk up and become much more global competitors, he said.

Indeed, the options market, where rumours can swirl well before any deal is announced, did not witness any unusual activity in the shares of Citicorp or Travelers last week, according to options traders.

This makes a financial industry grizzly bear out of two very large black bears, said Rutherfords Brown. This is like a big Buddha sitting looking down at the rest of the industry. This is an audacious merger, to say the least.

Don Hays, director of investment strategy at Wheat First Union, said, Wow. You know every time the market looks a little vulnerable, you get something big.