WealthManagement Magazine

Wheat First Reps Like First Union Merger

Wheat First reps seem positive after the Aug. 20 announcement that their firm will be acquired by Charlotte, N.C.-based First Union Corp., the nation's sixth largest bank.The acquisition was billed by both Wheat First, a Richmond, Va.-based regional, and First Union as an attempt to provide equity underwriting to the bank's growing corporate client base, while also expanding its services to individual

Wheat First reps seem positive after the Aug. 20 announcement that their firm will be acquired by Charlotte, N.C.-based First Union Corp., the nation's sixth largest bank.

The acquisition was billed by both Wheat First, a Richmond, Va.-based regional, and First Union as an attempt to provide equity underwriting to the bank's growing corporate client base, while also expanding its services to individual investors.

The stock-swap deal was valued at close to $500 million.

Reps, who together with other Wheat First employees own the firm, like the deal and seem ready to vote for it.

"It's a surprise but not totally unanticipated," says one Wheat First branch manager who notes that the industry is consolidating. "We're pleased that we're picking our dance partner. The deal will bring corporate finance and M&A clients who can use our services--Richmond tells us it's a capital-markets driven merger."

With Glass-Steagall going down, firms will have to form these alliances to stay competitive, notes another Wheat First producer. "It's a nifty combination--excellent from a capital markets standpoint." This broker adds that the larger firm should help Wheat First better compete: "We'll be adding a few things that a firm such as Merrill has--like mortgages, for example."

In a prepared statement, Edward Crutchfield, chairman and CEO of First Union, describes the deal as a combination of First Union's "national corporate middle-market client base and capital markets capabilities" with Wheat First's equity underwriting and distribution, M&A advisory and municipal finance capabilities.

One broker admits there's always concern about how a new owner might interfere with the business. But an executive of the brokerage claims First Union will be hands-off in terms of management style, even though Marshall Wishnack, chairman and CEO of Wheat First, will report to executives in First Union's Capital Markets division.

According to the two firms, the new brokerage entity, to be called Wheat First Union, will have 4,200 registered reps with over 2,000 locations in 19 states. Wheat First now has over 900 brokers in 126 branches.

"Our understanding is that bank offices and brokerage offices will not combine," says the Wheat First branch manager. A Wheat First spokesperson confirms that there are no plans to consolidate locations.

Wheat's $9 billion asset management subsidiary, Mentor Investment Group, will continue to operate under that name. First Union owns the Evergreen Keystone Funds, with approximately $31 billion in assets. The bank bought the Keystone family of funds in December 1996.

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