Amex drops reins at First Data
Saturday 06 March 1993
The offering of shares, which will reduce Amex's stake in First Data to about 23 from 54 per cent, is expected to raise about dollars 1.2bn. American Express brought the first 46 per cent of First Data to the market last year in an initial public offering that raised dollars 1.1bn.
The sale is expected to close some time in the second quarter, at roughly the same time as Amex's Shearson Lehman subsidiary finalises the sale of its Boston Company money-management subsidiary.
Mellon Bank, of Pittsburgh, will pay a total of dollars 1.5bn in cash and securities for the Boston Company unit, although the after-tax gain to the securities firm will be only dollars 150m.
Last year, after a series of large losses, the financial-services conglomerate reversed a decade-long acquisition drive and began looking for buyers for operations outside its core travel-and-charge card business.
The pace of the restructuring, however, was too slow for Amex shareholders, who forced James Robinson, chief executive, out of office last month.
Mr Robinson succeeded in having his chosen successor, Harvey Golub, named to run the company, but failed in his own bid to stay on as chairman of Shearson.
Amex refused to discuss any further disposals yesterday, although many analysts believe the company will eventually sell or spin off Shearson, America's second-largest retail brokerage.
Amex shares responded positively to news of the disposal, adding 37.5 cents to dollars 25.50 by midday yesterday.
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