MER taking out JEF rumors?

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ymh_ymh_ymh's picture
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Joined: 2005-09-05

Well, the rumor is now PUBLIC (thanks to Reuters) and those options sure got frisky on JEF today. It's my opinion that $56.00 a share is too low (please read the JEF hot board YHOO has as it appears some prop trader "heard" those rumors a little earLEHier than Reuters did).
The reason why JEF would make a great acquisition for MER is Rich Handler's 10 times the man Stan ever was or will be. JEF owns the middle market. Also, JEF's Deputy General Counsel, Cathleen Shine, isn't a bimbo. Morgan Lewis does NOT run JEF's legal department. Morgan Lewis sometimes "appears" to run MERrills.
FD: do your own due diligence on these rumors, brokers. If you work for MERrill and the rumor is true, Rich Handler hates slackers and you boys and girls will have to learn how to trade instead of schlepping house mutual funds and variable annuities.
FD: I did not start those rumors but the prop trading desks were buzzing today with many M&A rumors (not just in the broker-dealer sector).
 

BrokerRecruit's picture
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Joined: 2005-04-19

Could someone explain this to me -
Why would MER want to acquire JEF?  Aren't they primarily institutional brokerage and investment banking?  When MER acquired Advest, most of the institutional reps were told that their clients were covered and were told where the door was when everything was finalized.  Wouldn't the same essentially happen with JEF?

ymh_ymh_ymh's picture
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Joined: 2005-09-05

JEF has the best middle market research/trading desk in the world (bar none). JEF doesn't have many brokers. The ones they do have are not "retail." They cater to UHNW or institutions (mutual funds and hedge funds).
I could see why a MERrill whose equity research department is a joke, would have interest in a JEF. That being said, sometimes prop trading desks start rumors just to "juice" a position they are holding. My guess is some prop trader started the rumor as by about 1120, quite a few prop trading desks were talking about it.
On the Advest fiasco at MER, someone should get fired over that deal (but they probably won't). Maybe it was Gorman's idea (farewell present to Stan).
Happy holidays to everyone over here.

rightway's picture
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Joined: 2004-12-02

News Release
Monday 21 March 2005, 15:15 GMT

Monday 21 March 2005

CITY

Institutional Investor

Hedge Funds Name Merrill Lynch Top Firm for Europe's Best Analysts in Alpha Magazine

NEW YORK, March 21 /PRNewswire/ -- Merrill Lynch, which ranked third in Institutional Investor's 2005
All-Europe research team rankings, jumps to the top spot in hedge fund
managers' esteem, the March/April issue of Alpha magazine reports. To obtain
its rankings, Alpha retabulated the results of II's 2005 All-Europe and
Emerging EMEA research teams to count only votes cast by hedge funds.
Fourteen first-place squads in 13 categories differ from those that rank in
the overall survey. UBS, the first-place winner in this year's overall
survey, ties for second with Deutsche Bank, which also finished second in the
broader ranking. Credit Suisse First Boston jumps from sixth place in the
general survey to fourth, while last year's hedge fund favorite, Morgan
Stanley, appears in fifth, matching its place on the All-Europe leaderboard.

Alpha said that sell-side researchers are finding they must fine-tune
their work if they hope to impress the most demanding of clients in Europe,
where hedge funds are growing fast. Assets controlled by the 25 biggest
European funds, as measured by Alpha, rose 44 percent during the 12 months
ended September 30, 2004. "Long-only managers want the standard proactive
service -- analysts making the calls," says Merrill Lynch's Simon Greenwell,
head of equity research for Europe. "The hedge funds don't want that. What
they do respect is for us to be very responsive to their requests."

The leaders in Developed Europe, according to the March/April issue of
Institutional Investor's Alpha Magazine:

Rank Total team positions Hedge All- Hedge All- fund Europe fund Europe 2005 2005 Firm 2005 2005 1 3 Merrill Lynch 20 29 2 2 Deutsche Bank 19 31 2 1 UBS 19 36 4 6 Credit Suisse First Boston 18 22 5 5 Morgan Stanley 15 23 6 4 Smith Barney Citigroup 13 27 7 8 Goldman Sachs International 12 10 8 10 J.P. Morgan 11 7 8 7 Lehman Brothers 11 18 10 8 Dresdner Kleinwort Wasserstein 5 10 11 15 Enskilda Securities 2 1 12 15 ABG Sundal Collier 1 1 12 10 ABN Amro 1 7 12 - Bear Stearns International 1 0 12 12 CA Cheuvreux 1 6 12 15 Carnegie Investment Bank 1 1 12 13 Cazenove(1) 1 2 12 15 Davy 1 1 12 13 Exane BNP Paribas 1 2 12 15 Nomura International 1 1 Hmmmmm.....

blarmston's picture
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Joined: 2005-02-26

Well, at least ML's research dept in Europe isnt a joke....
And ML's domestic equity research dept (with the largest force of analysts and with the largest research expenditures on the street) is by no means a joke.. In fact they have consistently been rated among the upper quartile in research proficiency.
Oh well, all that doesnt really matter does it? Just sell something....

ymh_ymh_ymh's picture
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Joined: 2005-09-05

Greenwell's right about about a few things. Why is it that so many SELL side analysts say SELL at the bottom and BUY at the top? I suppose it has something to do with the fact most still report to the investment bankers, doesn't it?
So has Bobby McCann taught you Merrill retail brokers how to read price charts yet or is he saving that lesson for next year?

blarmston's picture
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Joined: 2005-02-26

Actually no... We are too busy meeting with millionaires, managing the largest books on the street, and producing the highest in the industry.

Greenbacks's picture
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Joined: 2004-12-21

ymh_ymh_ymh wrote:
Greenwell's right about about a few things. Why is it that so many SELL side analysts say SELL at the bottom and BUY at the top? I suppose it has something to do with the fact most still report to the investment bankers, doesn't it?
So has Bobby McCann taught you Merrill retail brokers how to read price charts yet or is he saving that lesson for next year?

Yes it does!
If any one listens to a wire house anylyst they are still a rookie or have not figured out how the corporate world works! There book will blow up on them. And it is just not ML it is all of them.

ymh_ymh_ymh's picture
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Joined: 2005-09-05

I guess that's why guys like Jake Zamansky can afford to have 2nd vacation homes in the Hamptons, and 3rd ones in Aspen.
 
 

blarmston's picture
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Joined: 2005-02-26

"If any one listens to a wire house anylyst they are still a rookie or have not figured out how the corporate world works! There book will blow up on them. And it is just not ML it is all of them."
I agree to an extent. I wouldnt totally rely on company specific research, but use it as a second opinoin on indy research from say Morningstar.  However, I do use our firms Research and Investment Committe  (RIC) reports. They are a great reason to stay in touch with prospects and inform current clients... If anyone wants to check out our year end and 2006 outlok report, let me know and I will post it on here.... A good read for over the holidays...

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