Schwab May Buy Chase’s Rose & Co.

Charles Schwab & Co., the nation’s largest discount brokerage, confirmed Monday that it is exploring the possible acquisition of Rose & Co., Chase Manhattan Corp.’s discount brokerage subsidiary.

A Schwab spokesman said the discussions were consistent with the San Francisco-based company’s “aggressive acquisition strategy.”

He said Schwab purchased several small discount brokerage houses in the early 1970s.

Aware of Risks

Rose & Co. is based in Chicago and has several hundred employees working in nine U.S. offices.

Chase Manhattan purchased the company in August, 1983, from founder John L. Rose for an undisclosed sum.

Discount brokerages, which rely heavily on business from individual investors, have suffered since the October, 1987, stock market crash.

“When Chase purchased Rose we were fully aware of the cyclical nature of the discount brokerage industry,” said Chase spokesman Steven Rautenberg.

He said Chase recently evaluated Rose’s operations and decided to solicit officers to “see if there was interest out there.”

‘Neat Little Business’

He said several firms responded with proposals, but Schwab and Chase are currently involved in “serious discussions” and Chase hopes to reach a decision soon.

“Strategically, while the discount brokerage is a neat little business, it’s not pivotal to our consumer strategy or securities strategy,” he said.

Schwab, with 109 offices nationwide, handles about 40% of the nation’s discount brokerage business.

Schwab reported net income of $7.4 million on revenue of $392 million for the year ended Dec. 31, 1988, compared to net income of $24 million on revenue of $465 million in 1987.

Chase does not break out sales figures for Rose.