Drexel Puts Its Prized Lists on the Block
The employees have been laid off. The business is shuttered. And now bankrupt junk bond king Drexel Burnham Lambert is not-so-quietly selling its assets, including its prized computerized database.
In an advertisement in today’s editions of the Wall Street Journal, the brokerage that virtually created the junk bond market a decade ago is offering to sell all the computer software and files from its corporate finance and high-yield bond departments.
Buyers may purchase all or portions of the lists, on an exclusive or non-exclusive basis, a Drexel spokesman said, adding that there is no minimum bid and that all reasonable offers received by April 19 will be considered.
Among the items on the auction block are a list of Drexel’s contacts, including the names, addresses and titles of key executives at nearly 4,000 firms; a chronicling of the organization of nearly 3,800 mergers since 1982; and Drexel’s own “high-yield bond system,” a one-of-a-kind integrated database offering just about everything anyone might ever want to know about junk bonds, including their price history, institutional portfolios, client data and new issue deal system.
Wall Street estimates of the sales price of the database range from several hundred thousand dollars to several million dollars.
“It’s worth a fortune,” said Fred Roberts, a Los Angeles investment banker and former district chairman of the National Assn. of Securities Dealers. “It’s the ‘ultimate weapon’ in the right hands.”
The only problem, Roberts and others noted, is that the most likely potential buyers of this information are the very Wall Street brokerages that would be the most unwilling to want to admit publicly that they didn’t already have it, or something just as good.
Nevertheless, Wall Street insiders speculated that Merrill Lynch, First Boston and Donaldson, Lufkin & Jenrette Securities are among the most likely bidders for the database. A Merrill Lynch spokesman said the brokerage is interested in talking to Drexel; representatives of the other two brokerages could not be reached for comment late Monday.
