NEW YORK (CNNfn) -- Partners of Montgomery Securities will meet this weekend to consider selling all or part of the investment bank to an unidentified suitor in a deal that could value Montgomery at perhaps $1 billion, CNNfn has learned.
Several Montgomery partners, speaking on condition of anonymity, said Montgomery is in discussions with a large, non-U.S. bank about a tie-up. However, sources declined to identify the potential suitor.
Other media have also reported that Montgomery might merge with U.S.-based NationsBank.
Montgomery officials confirmed Thursday that partners are meeting in San Francisco over the weekend, but declined to comment on the possibility of a sale.
Nonetheless, Montgomery Chairman Thomas Weisel openly said earlier this month that his firm wanted an outside partner, which would provide an equity infusion in return for up to a 20-percent stake in the company.
In a June 10 New York Times article, Weisel said Montgomery sought either "a U.S. firm with debt capabilities but not much equity, or a foreign firm without much U.S. investment banking business."
One partner told CNNfn on Thursday that a deal with an overseas bank "makes sense, because Montgomery doesn't have a global capital markets presence."
Montgomery currently has about 3.2 percent of the domestic equity underwriting business, up slightly from the 3 percent that it garnered in 1996, a year when the firm helped raise $4.3 billion.
The investment bank has effectively carved out a niche market in the technology sector.
Talk of a Montgomery deal comes during a period of rapid deregulation in the securities industry.
U.S. laws dating back to the Great Depression have limited links between commercial banks -- which handle retail accounts like checking and loans -- and investment banks, which focus on financing for things like stock offerings.
However, officials have been easing those rules recently.
As a result, commercial banks are quickly looking at consolidating with investment banks.
At the same time, cross-boarder banking deals have accelerated as international firms race to increase market share in the booming U.S. market.
In the past, two overseas banks have expressed interest in expanding their U.S. operations.
ING Barings, a unit of Dutch-based ING Group held merger discussions with Dillon Read & Co., but talks broke off.
Britain's Barclays Plc has also expressed interest in acquiring a smaller investment boutique to complement its BZW Securities arm.
Domestically, NationsBank has publicly expressed interest in Montgomery.
Recent report suggest that a 20-percent Montgomery stake could fetch as much as $200 million, giving the investment firm an overall value of about $1 billion.
That means any buyer would pay a steep premium for Montgomery, which only has an estimated capitalization of $150 million, according to Securities Industry Association figures.
Dean Eberling, an analyst at Smith Barney, said any Montgomery deal "is going to (involve) a high valuation."
Eberling said a likely buyer "needs access (to Montgomery's market), but the buyer will also pay dearly for a niche."
-- Bambi Francisco and Robert Liu