Raymond James Financial (RJF) said late Monday that it would sell 10.5 million shares of common stock to help it fund its $930 million purchase of Morgan Keegan from Regions (RF), which it expects to close in April. As part of the sale, about 1 million shares will be sold by siblings of Executive Chairman Tom James.
In addition to proceeds from the stock sale–which at Tuesday’s stock price ($34) would raise about $323 million–Raymond James will pay for Morgan Keegan with cash and the proceeds from an expected public offering of some $600 million of senior debt securities. Tuesday’s announced stock sale is being managed by JPMorgan Chase.
The St. Petersburg, Fla.-based financial company also says it has access to a $900 million loan bridge facility that is available to finance a portion of the Morgan Keegan acquisition and related fees, such as the retention package it is offering advisors with $300,000 and up in yearly fees and commissions. Raymond James has about 5,400 advisors and Morgan Keegan about 1,000.
In October, Regions reportedly offered potential suitors some $200 million in financing to get private-equity and other investors interested in the purchase. Raymond James said it would buy Morgan Keegan in mid-January after the private-equity firms failed to pursue the acquisition.