Shareholders of both companies and regulators on both sides of the Atlantic must approve the deal, expected to close later this year. The merger was recommended by the board of Paine Webber. Paine Webber closed yesterday at $66.87 1/2 a share, up $16.93 3/4, or a gain of 34 percent. The offer is 50 percent in cash and 50 percent in UBS shares and represents a premium of 47 percent over Paine Webber's closing price on July 11. The two sides came to a deal under which UBS will offer $73.50 per Paine Webber share. Marron said he never had serious discussions with any other potential buyers. Marron said that during the first meeting, he told Ospel he was "curious." Other meetings followed. Late in the spring, Marron met with Ospel, whose quiet-spoken manner contrasts with his flashy clothes and furniture, as well as his aggressive acquisition sprees that ultimately led to one of the biggest deals in the banking world-the merger of Swiss Bank and Union Bank of Switzerland to create UBS three years ago. There were first some informal discussions with UBS. This spring Marron softened his tone, suggesting that a deal might be possible. He expects that individual investors are going to want to invest worldwide, and Paine Webber needs a bigger operation to get that business. "We think this decade is going to be the decade of the global individual," Marron said. In the 1980s it was the increasing cash needs of American companies going global, and in the 1990s it was the growing involvement of individuals in the stock market. In the 1970s it was the growth of mutual funds and the insurance industry, he said. "What characterizes our business on a long-term basis are the major trends that generate the flow of funds," Marron told reporters. The biggest problem facing Paine Webber is that the brokerage industry is undergoing another major change and the firm must adjust, Marron said. Its net income fell 10.4 percent for the quarter ended June 30 to $146.3 million, reflecting the difficult market in the recent quarter. Its latest earnings, released yesterday, show mixed results for the company's strategy. The company grew, but its brokerage operations could not catch up with Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., and Citigroup's Salomon Smith Barney Inc. And in an era of discount online trading, when brokers were supposedly dinosaurs, Paine Webber's 8,554 brokers continued to pursue "high net worth" customers.įor years Marron firmly rejected a series of suitors and declared his pride in the firm's independence. Paine Webber, under the 65-year-old Marron, had until now remained a curious link to the past, clubby world of Wall Street, where leaders imprinted their personalities on their companies and brokerages catered mainly to the wealthy and privileged.įor example, the 6-foot-6 Marron, a serious art collector, filled the walls of Paine Webber's corporate headquarters with paintings by Roy Lichtenstein, Jasper Johns and other major artists, blithely ignoring criticism by some analysts that this might not be the way to maximize earnings. Paine Webber will shed its identity as an independent brokerage, something it was able to maintain through two turbulent decades as blockbuster deal after blockbuster deal chewed up and consumed financial firms across the globe, spitting out in their place massive, faceless financial powerhouses. The $16 billion deal is the biggest foreign takeover of a U.S. UBS will pay $10.8 billion for Paine Webber's outstanding shares, assume $4.3 billion of Paine Webber's debt and set up a bonus pool of nearly $1 billion to retain critical employees. Marron and UBS chief executive Marcel Ospel appeared jointly at a news conference to announce that Paine Webber agreed to be acquired by UBS, Europe's third-largest bank. for the past two decades, turned to the head of Switzerland's UBS AG yesterday and called him "my boss," it was in many ways the passing of an era. Marron, who held firmly to the reins of power at Paine Webber Group Inc.
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