Rejected: SWS shoots down Sterne Agee acquisition offer

Less than 24 hours after revealing that they had received an unsolicited takeover proposal from the Sterne Agee Group Inc., officials for SWS Group Inc. — a Dallas-based firm with several hundred advisers—unanimously rejected the offer.
OCT 05, 2011
Less than 24 hours after revealing that they had received an unsolicited takeover proposal from the Sterne Agee Group Inc., officials for SWS Group Inc. — a Dallas-based firm with several hundred advisers—unanimously rejected the offer. In a letter to Sterne Agee chairman and chief executive James Holbrook issued today, SWS chairman Don Buchholz called Sterne Agee’s offer “highly conditional” and “opportunistic.” Mr. Buchholz stated that the board of directors at SWS considered the offer — which Sterne Agee delivered late Wednesday, after several previously offers were rebuked by SWS — but ultimately determined that the offer of $6.25 a share “substantially undervalues” the company’s future potential. In total, the Sterne Agee offer would have valued SWS at roughly $203 million. Mr. Buchholz also noted in his letter that he and other executives at SWS “do not appreciate the distracting, interfering and unprofessional communications from Sterne Agee employees to SWS Group employees regarding this proposal and respectfully request that those communications cease immediately.” A spokesman for SWS declined to offer any specific details on the nature of these communications. William Holbrook, chief operating officer at Birmingham, Ala.-based Sterne Agee, declined to comment on the rejected offer or the claims in Mr. Buchholz’s letter. The combination of Sterne Agee and SWS would have created a regional broker-dealer with more than 800 financial advisers and brokers. Sterne Agee's independent-broker-dealer arm had 252 reps as of Sept. 30, according to the InvestmentNews Broker-dealer Data Center. That ranked the firm as the 78th-largest independent broker-dealer in the most recent InvestmentNews survey. (See the full ranking at The largest independent broker-dealers ranked by total reps.) However, Sterne Agee has managed to boost its rep count at a greater clip than most independent broker-dealers over the last year and ranked as the 17th-fastest-growing IBD, with a 14.5% increase. (See the ranking of the Fastest-growing independent broker-dealers.)

Latest News

Financial advisors, what is your volatility game plan for client management?
Financial advisors, what is your volatility game plan for client management?

With targeted "comfort calls" and strategically automated follow-ups, advisors who leverage their CRM systems effectively can show up when clients need them most.

Trump eyes no taxes for Americans making less than $150k, says Lutnick
Trump eyes no taxes for Americans making less than $150k, says Lutnick

The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.

No new trial for convicted GPB Capital executives
No new trial for convicted GPB Capital executives

"I've seen lots of denial in this business but this GPB thing take the cake," says one industry executive.

BlackRock-led deal for Panama Ports draws ire from China
BlackRock-led deal for Panama Ports draws ire from China

Commentary from state-owned publication blasts sale to investor consortium as "spineless groveling," denting Hong Kong-based firm's stock.

Gold soars past $3,000 as Trump turbocharges record rally
Gold soars past $3,000 as Trump turbocharges record rally

Higher interest rates and a strong US dollar, which traditionally act as headwinds, haven't deterred market-stung investors from seeking refuge in the yellow metal.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies