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In this shared commentary, Aplomb Strategies writes that when considering a firm’s governance structure, a holistic approach makes the most sense.

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April 30, 1999

EVEREN Trading in Chicago May Be Moved Out of Town

By Michael L. O'Reilly

Speculation Rife as First Union Acquires FirmWith the planned acquisition of EVEREN Securities by First Union Corp., speculation is rife that the EVEREN trading department will be folded into First Union's trading operations in either Charlotte or Richmond.

First Union has been running its trading operations out of Richmond since its $494 million purchase of Wheat First Butcher Singer in 1997, but does not have a trading department in Charlotte, where the bank has its headquarters.

EVEREN maintains its trading department - with more than 40 traders - in its Chicago headquarters.

Dan Kravits, director of Nasdaq trading at EVEREN, speculated that his trading team and operations would likely be consolidated into First Union's existing operations in either Charlotte or Richmond. But he stressed that no decisions had been made.

"I don't expect us to maintain a large capital-markets operation in Chicago," Kravits added. "The EVEREN name will be gone. But I'm not sure of too much yet. It's too soon."

A First Union spokesperson in Richmond said the bank had made no final plans on the integration of EVEREN.

Charlotte-based First Union announced in late April its intention to purchase EVEREN in a $1.1 billion deal. The acquisition is expected to close in the fall.

First Union, the nation's sixth largest bank, was reportedly interested in expanding its brokerage platform with EVEREN, extending its reach west of the Mississippi River.

EVEREN has 1,839 brokers, and 167 offices in 28 states, with its strongest operations in California, Colorado, Illinois, Ohio, Texas and Wisconsin. The combined company would have three million brokerage accounts and $147 billion in assets, making First Union the sixth-largest brokerage firm in the U.S.

"We had taken EVEREN as far as it could be taken. We felt we needed to look for something long term," Kravits said. "There were a lot of similarities [with First Union], but no real overlaps. Overall, it's a good deal for this firm. With all the things we've done recently, this is the icing on the cake."

Kravits added that, although the two businesses compliment each other, EVEREN would likely face some cutbacks as a result of the deal.