ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, February 6, 1997 TAG: 9702060075
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: ANDREW FRASER ASSOCIATED PRESS
The raging bull market has made it more lucrative for the likes of Morgan Stanley to have a sales force that can reach smaller investors through storefronts or employer-sponsored retirement plans.
Morgan Stanley Group Inc. is a powerhouse in mergers and in underwriting securities. Dean Witter Discover & Co. is strong in the retail brokerage business, selling stocks, bonds and such to the public.
The stock-swap merger would create the world's biggest securities firm and surpass Merrill Lynch, current leader in underwriting and retail brokerages. The new firm would have a market capitalization of $23 billion, compared with Merrill's $14.1 billion.
The deal also is expected to prompt others to look at finding new partners that would put together both ends of the securities business.
Ben Powell, manager of the Roanoke Valley office of Dean Witter Reynolds Inc., called the merger proposal "wonderful news" that will be "a positive" for the two companies. He said he expected no changes in the company's office on Starkey Road.
``While it's a great day for Dean Witter, Morgan Stanley and our clients, it's probably more gray and rainy for some of our competitors,'' said Philip Purcell, Dean Witter's chairman and chief executive. ``Together, we have a very clear vision of our future. We are bent on creating the pre-eminent financial services firm globally.''
The combined company will manage $270 billion in financial assets, the most of any securities firm.
Purcell said there would be some savings from the merger, but when asked about job reductions, he declined to comment.
Wall Street appeared enamored with the deal. Morgan Stanley shares shot up more than 13 percent, or by $7.87 1/2, to $65.25 Wednesday on the New York Stock Exchange, where Dean Witter rose more than 5 percent, or $2, to $40.62 1/2.
Each Morgan Stanley share will be exchanged for 1.65 Dean Witter common shares.
Purcell will be chairman and chief executive of the new company, while Mack will be president and chief operating officer.
Its board of directors will be evenly split. The deal is expected to be completed by the middle of this year, pending shareholder and regulatory approval.
Staff writer Mag Poff contributed to this report.
LENGTH: Medium: 57 lines ILLUSTRATION: PHOTO: AP. 1. John Mack, president of Morgan Stanley (left),by CNBand Philip Purcell, CEO of Dean Witter, announce their companies'
plan to merge into the securities industry's new power- house. 2.
(no caption). color. Graphics: Chart by AP. color.