Schwab Says He's 'Tickled Pink' to Be Free of Bankamerica Corp
Schwab said Monday an investor group he heads will pay BankAmerica $280 million to buy back Charles Schwab & Co., and that he would hold a 40 percent to 50 percent stake.
Schwab, who sold the brokerage to BankAmerica in 1983 for $53 million in stock, said the buyout would involve $175 million in cash and $105 million in notes. He said he provided about $8 million.
BankAmerica, meanwile, followed the Schwab announcement by saying it will sell a British mortgage company for $37 million and cut more jobs.
With 1.6 million customers and $1.5 billion in assets, Schwab & Co. is the nation's largest discount stock brokerage. A discount brokerage offers fewer services and lower commission costs than a full-service brokerage.
Schwab told a news conference that by breaking with BankAmerica, Schwab & Co. would be freed from federal laws prohibiting subsidiaries of bank holding companies from offering certain products and services.
Among new services Schwab & Co. plans are tax-free municipal bonds, real estate investments and new mutual funds.
``In the last four years we've spent a lot of time with lawyers,'' he said. …