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A.G. Edwards rises on talk
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June 6, 2001: 5:06 p.m. ET
Morgan Stanley rumored buy of No. 7 retail broker causes shares to rise
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NEW YORK (CNNfn) - Shares of A.G. Edwards Inc. rose nearly six percent Wednesday on speculation that venerable Wall Street firm Morgan Stanley was plotting a takeover.
A.G. Edwards shares gained $2.58 to close at $46.69 Wednesday while Morgan fell $1.60 to $64.60
A purchase of A.G. Edwards would make Morgan Stanley the largest brokerage, by number of brokers, surpassing rival Merrill Lynch.
New York-based Morgan (MWD: down $1.60 to $64.50, Research, Estimates) currently has more than 14,108 brokers. St. Louis-based A.G. Edwards (AGE: up $2.58 to $46.69, Research, Estimates), the nation's seventh largest retail brokerage firm, has more than 7,100 financial consultants and 700 branches.
Merrill Lynch is currently the top U.S. retail brokerage, with 16,000 brokers.
Consolidation in the banking sector has been expected with A.G. Edwards the subject of rumor for some time. Speculation mounted last fall after a spate of mergers, specifically Chase Manhattan Corp.'s $33 billion buy of J.P. Morgan & Co. last September and Credit Suisse Group's $11.5 billion takeover of Donaldson, Lufkin & Jenrette Inc. last August.
Morgan Stanley declined to comment while A.G. Edwards played down the speculation.
"We continue to believe that it is in the best interests of our shareholders, clients and employees that we remain independent," said spokeswoman Margaret Welch.
However, a Morgan-A.G. Edwards tie-up would make little sense, a person familiar with the situation told CNNfn.com, since Morgan Stanley already has a retail brokerage -- the firm of Dean Witter, which it bought in 1997. 
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