Royal Bank of Canada buying U.S. securities firm

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Thursday, Sept. 28, 2000 | 11:18 a.m.

THE ASSOCIATED PRESS

TORONTO -- Royal Bank of Canada said today it will acquire securities firm Dain Rauscher Corp. in a deal valued at about $1.5 billion.

The acquisition, expected to close at the end of the year, will give Royal Bank of Canada established capabilities as a full-service retail brokerage and investment bank in the United States, the Toronto financial-services company said.

It also said the takeover will give the new company -- RBC Dain Rauscher Wessels -- "greater critical mass" and a platform for future growth.

Under the agreement, each common share of Dain Rauscher will convert into the right to receive $95 in cash.

Dain Rauscher has about 12.9 million shares outstanding and reported approximately $1.2 billion of revenue for the last 12 months. Shares of the company leaped on the New York Stock Exchange this morning, rising $13, or 16.3 percent, to $92.88.

The stock of Royal Bank of Canada declined slightly on the Big Board, however, slipping 50 cents, or 0.8 percent, to $60.75. The company has about $189 billion of assets.