BankAmerica Set to Acquire Robertson Stephens, Source Says

BankAmerica Corp. is about to announce a deal to acquire investment bank Robertson Stephens for $540 million, sources close to the situation said Sunday.

The proposed deal between the two San Francisco-based companies is the latest in a growing trend among bank holding companies, which are buying brokers because of the easing of a restriction on the amount of securities underwriting a bank holding company can do.

Neither BankAmerica nor Robertson Stephens would comment, but the source said the deal is a result of recent discussions between the two companies.

After the acquisition, Robertson Stephens, which has swelled from 30 employees in 1981 to 800 currently, will become a unit of BankAmerica, said one source close to the deal.

Robertson Stephens currently leases space from BankAmerica in the BankAmerica headquarters building in downtown San Francisco.

Since last week, rumors were circulating throughout the San Francisco investment community that the two companies were talking. “There’s been a lot of talk in the hallways,” said one Robertson Stephens employee.

BankAmerica has repeatedly said it plans to get into the underwriting business by growing within, acquiring an underwriter and forming an alliance.

In January, PaineWebber Group Inc. stock soared on reports that BankAmerica was in talks to buy that firm. But analysts have said that Robertson Stephens, with its large presence in underwriting with a specialty niche in health care and technology, is a more logical fit.

“It’s a logical acquisition for BankAmerica, given the strength which Robertson Stephens has in equity underwriting and asset management, which are areas BankAmerica wants to grow in,” said Ray Soifer, analyst with Brown Bros. Harriman.

“And given the relatively small size of the deal, compared to the nearly $2.0 billion that Bankers Trust payed for Alex. Brown, there is not likely to be much effect on BankAmerica earnings,” Soifer said.

Robertson Stephens has $4.2 billion under management. It completed 125 stock offerings, raising $8.6 billion, and advised on 50 deals totaling $9 billion in 1996.