Hambrecht Shares Soar on Talk of Merger
Shares of Hambrecht & Quist, the San Francisco investment bank built on financing California’s high-tech industry, surged more than 20% on Tuesday on speculation that a suitor, most likely Credit Suisse First Boston, will offer to buy the firm as early as this week, sources said.
Hambrecht & Quist, long rumored to be a takeover target, rose $6.44 a share in very heavy trading on the New York Stock Exchange to close at $36.31. In December, Hambrecht’s stock price reached a record high of $46.25 on speculation that it was about to be acquired by Merrill Lynch & Co.
A spokesman for Credit Suisse in New York declined Tuesday to comment on the merger talk as did Carole Newman, a spokeswoman for Hambrecht & Quist.
Another possible suitor for Hambrecht, besides Merrill, is Deutshce Bank Securities, sources said. On Tuesday, Frank Quattrone, George Boutros and Bill Brady, three high-profile investment bankers for high-tech companies, quit Deutsche Bank Securities to join Credit Suisse First Boston. The bankers weren’t immediately available for comment.
“H&Q; is exploring all alternatives,” said Michael Flanagan, an analyst at Financial Service Analytics in Philadelphia. “I still think they would prefer to remain independent, but they can’t prevent exploring an offer too good to be true.”
Hambrecht & Quist Chief Executive Daniel Case has said that he wants to keep H&Q;, which went public in 1996, independent. Formed in 1968 by William Hambrecht and George Quist, the firm is a leading underwriter of health-care and technology companies. So far this year, Hambrecht is the sixth-largest underwriter of initial public offerings for California-based companies.
Credit Suisse First Boston, the New York-based investment banking arm of Zurich, Switzerland’s Credit Suisse Group, has long sought to have a strong technology practice, and buying Hambrecht would give it immediate credibility.
Credit Suisse recently considered buying Cowen & Co. and BankAmerica’s Robertson Stephens unit. Cowen was bought in February by Societe Generale for $615 million and Robertson Stephens was just sold to BankBoston Corp. for $800 million. At least one Hambrecht employee said Tuesday that despite the acquisition rumors, it was business as usual. Employees there are familiar with acquisition rumors.
“We’ve seen this movie before,” the employee said.
Times wire services were used in compiling this report.