SPECIAL REPORT: PAINEWEBBER/UBS WARBURG DEAL

The UBS Warburg buyout of PaineWebber is meeting with positive response from PaineWebber reps. The deal's logic and a retention package help."I really like the corporate fit," says a Chairman's Council member in the Southeast. "We've been squeezed out of deals in the past because we didn't have a bank behind us. Now it's the opposite. Clients are delighted that we have a Swiss bank as a partner."The

The UBS Warburg buyout of PaineWebber is meeting with positive response from PaineWebber reps. The deal's logic and a retention package help.

"I really like the corporate fit," says a Chairman's Council member in the Southeast. "We've been squeezed out of deals in the past because we didn't have a bank behind us. Now it's the opposite. Clients are delighted that we have a Swiss bank as a partner."

The retail business will be fine "if they leave us alone, let us keep our independence and don't tell us how to run things," the broker says.

A PaineWebber rep in the Midwest agrees. "I think it's a terrific deal. We've grown from 60 research analysts to 400. That's an enormous pickup."

He says the two firms have worked together quietly before, with PaineWebber buying UBS research on international issues for the past few years. "We've been test-driving each other," he says. "They've seen how our [brokers] operate, and they liked what they saw."

A West Coast rep at the firm is also positive. "There is very little overlap," he says. "I'll deal with the same people in New York. ... I can see a possible disruption of the PaineWebber way of doing things, but that is not necessarily a bad thing."

With UBS's deeper pockets, it will be easier for PaineWebber to make investments in technology, the West Coast rep says. And the Swiss bank is not finished doing deals, he says. "Their acquisitions can only strengthen our product lines."

These reps didn't know of any brokers leaving the firm as a result of the merger. A retention package was announced shortly after the deal became public (see "PaineWebber Reps Get UBS Stock, Options," below).

Meanwhile, PaineWebber customers received a July 28 letter from CEO Don Marron assuring them PaineWebber would remain intact under UBS, and that their broker relationship would be unaffected. The letter highlighted UBS's resources, the expanded research coverage and more product capabilities.

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