Prudential-Bache Deal on Again for Thomson Offices

Prudential-Bache Securities Inc. salvaged a deal Monday that had fallen through last week by agreeing to acquire the branch offices and customer accounts of brokerage firm Thomson McKinnon Inc. for about $60 million.

Prudential-Bache, subsidiary of Prudential Insurance Co. of America, announced Friday that it was terminating its agreement to buy all of Thomson McKinnon because of balance sheet problems.

Under the agreement announced Monday, Prudential-Bache would acquire Thomson McKinnon’s 154 branch offices, 2,000 brokers and customer accounts.

By adding the retail network to Prudential-Bache’s 6,000 brokers and 302 offices worldwide, the company would become Wall Street’s fourth-largest firm, behind Merrill Lynch & Co., Shearson Lehman Hutton Inc. and Dean Witter Reynolds Inc.

A Prudential-Bache spokeswoman said “there may well be some branches that will be closed” after the merger is completed, and she noted that there would likely be some attrition among former Thomson brokers. Prudential-Bache, however, will spend an additional $60 million over three years for incentives to encourage the brokers to stay.

In addition, Prudential-Bache said it would acquire about 5% of Thomson McKinnon Asset Management, a limited partnership that manages the brokerage’s money and investment management business.

Prudential-Bache and Thomson McKinnon announced their intention to merge June 13. But the agreement was canceled after Thomson McKinnon liabilities were revealed in a “due diligence review.”