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D.E. Shaw seeks buyer
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November 24, 1998: 7:18 p.m. ET
Sale of financial products group will end alliance with BankAmerica in 2000
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NEW YORK (CNNfn) - D.E. Shaw and Co., L.P., the investment bank blamed for substantial trading losses at BankAmerica Corp. last quarter, said Tuesday it is seeking a financial partner or buyer for its financial products group
In a statement, Shaw said the move follows the September mega-merger between Bank of America Corp. and Nationsbank Corp., which the company said resulted in an overlap of services between Shaw and Nationsbank.
Shaw entered into an alliance with Bank of America in early 1997, before the bank agreed to merge in a blockbuster $60 billion deal with Nationsbank.
In October, BankAmerica stunned investors by disclosing it suffered $372 million in trading losses as a result of the bank's relationship with Shaw. At that time, the bank announced it would buy $20 billion in fixed-income securities from Shaw, in efforts to protect its $1 billion investment, adding it will liquidate the securities over time.
Shortly after disclosing the trading losses, Nationsbank announced that BankAmerica President David Coulter, the would-be successor to top executive Hugh McColl and the architect of the bank's alliance with Shaw was resigning.
A spokesman for the $1.7 billion hedge fund emphasized the move to seek a buyer for the unit was "thoroughly unrelated to the losses" and "strictly a result of the bank merger."
The sale of the financial group will not immediately end D.E. Shaw's alliance with Bank of America, with a line of credit in place through the end of the year and financing set until the year 2000. However, the spokesman said the alliance will likely "wind down" at that time.
While the company would not reveal any potential buyers, the spokesman said investment firm Wasserstein Perella & Co., which Shaw has retained for the transaction, has been "very busy" with preliminary inquiries.
Shares of BankAmerica Corp. (BAC) fell 3/8 to 64-13/16 Tuesday. 
-- by staff writer Nicole Jacoby
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BankAmerica Corp.
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