Two bulls in two pens
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Two bulls in two pens

News of a planned merger between Bankers Trust and broker Alex Brown came in a rush. In fact, though, the firms had long recognized their complementarities and had first started talking about a link-up in 1993. Peter Lee reports.

Newman's "vision thing"

The public announcement on Sunday April 6 of an intended merger between Bankers Trust and broker Alex Brown came a week earlier than planned. It had to. Rumours of a deal were beginning to spread. Earlier that weekend, Alex Brown salesmen were in Florida with the firm's chief executive, AB "Buzzy" Krongard, for a morale-boosting get-together. Krongard was surprised to be approached by an excited employee expressing enthusiasm about the merger talks. The employee happened to be married to a Bankers Trust managing director.

There seems to have been more loose talk than a married couple's breakfast conversation. On Friday the 4th there was frantic turnover in call options on Alex Brown stock, trading that may have set off an investigation by the SEC. (For the moment the regulator refuses to comment.)

It was a speedy, if inauspicious, start to the post-Glass-Steagall era. Previously, Krongard had appeared to rule out any deal with a bank for his firm, a national brokerage based in Baltimore best known for underwriting the equity of mid-cap and high-growth companies. And rumour had persistently linked Bankers Trust with other, larger securities firms such as Lehman Brothers and PaineWebber.

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