A.G. Edwards brokers mull life after acquisition

NEW YORK — Bracing for change, registered representatives at A.G. Edwards & Sons Inc. last week met the news that they are being acquired by Wachovia Corp. with a range of opinions.
“There’s a little twinge of anxiety,” said one A.G. Edwards rep, who is based in California and spoke on the condition of anonymity.
The wait to find out which offices will be closed as a result of the acquisition is fueling that anxiety, the rep added.
Wachovia of Charlotte, N.C., unveiled plans last Thursday to buy St. Louis-based A.G. Edwards for $6.8 billion.
About 6,600 reps are employed at A.G. Edwards. Combined with the 10,700 reps at Wachovia across various platforms, they will be part of a giant broker-dealer that will be second in size only to Merrill Lynch & Co. Inc. of New York.
As of late Thursday, Wachovia had not released details about the retention packages it will offer to A.G. Edwards reps. Those details, however, will be released “very quickly,” said Wachovia spokesman Tony Mattera.
Two teleconferences held between top executives at both firms and A.G. Edwards’ branch representatives and brokers after the deal was announced last week were “feel good” meetings, according to brokers and industry observers.
“Nobody knows yet what the total repercussions will be,” said another A.G. Edwards rep, who also asked not to be identified. Some reps feel that “Wachovia can upgrade our technology,” the second rep said.
The combined brokerage firm will be called Wachovia Securities, and the retail brokerage will be based in St. Louis. It will have about $1.15 trillion in client assets.
Wachovia Securities chief executive Daniel Ludeman will keep his title, while A.G. Edwards chairman and CEO Robert Bagby will be the chairman of the new entity.
The combined firm will operate 3,350 offices.
Other A.G. Edwards businesses, including research, underwriting, investment banking, mutual funds and trust, will be consolidated into the appropriate Wachovia business lines.
Founded in 1887, A.G. Edwards has managed to retain an unusually close-knit corporate culture in the face of massive consolidation within the brokerage industry, one observer noted.
“There’s big disappointment that the A.G. Edwards name is going away. The brokers are soaking it in,” said Danny Sarch, a brokerage recruiter in White Plains, N.Y.
He said he spoke to more than 20 A.G. Edwards reps and branch managers in the hours after the deal was announced.
A.G. Edwards reps enjoy the firm’s familial corporate-culture style, Mr. Sarch said.
“It appears that will all be going away,”
he added. “There’s resignation. The reps understand this is part of the
business.”
Mr. Mattera is sympathetic to such concerns and said Mr. Ludeman will be busy meeting with A.G. Edwards brokers in the coming weeks to allay any misgivings. “Even though this place is big, it doesn’t feel like a wirehouse,” Mr. Mattera said.
Wachovia expects the transaction to close by the end of the year, with full integration expected by early 2009.
The terms of the deal value A.G. Edwards at $89.50 per share, a 16% premium over the stock’s closing price last Wednesday.
The two firms could be a match culturally, as they are not based in New York and both tend to focus more on Middle America, said Rick Peterson, a recruiter in Houston.
Also, Wachovia has had success with acquisitions in the past, most recently in 2003 with the former Prudential Securities Inc. of New York, he said.
The deal will work “to the degree Danny Ludeman can convince the A.G. Edwards reps that ‘we’re not going to make you change your business or culture,’” Mr. Peterson said.
Dan Jamieson contributed to this story.
Bruce Kelly can be reached at bkelly @crain.com.