Chase Manhattan Corp. is close to signing a deal to sell off nine of its brokerage offices outside the New York metropolitan area.
It is negotiating with A.G. Edwards & Sons and Royal Alliance Associates, according to a bank executive familiar with the negotiations.
Chase wants a single buyer to take over the brokerage accounts and hire the employees of Chase Manhattan Investment Services in California and Texas, among other states, the executive said.
J. Peter Benzie, president of Chase's brokerage unit, said the company is in "serious negotiations with two or three national brokerage firms," but he would not confirm that they include A.G. Edwards and Royal Alliance.
Chase is preparing to merge with Chemical Banking Corp. on April 1. Observers said plans to sell the brokerage offices are meant to cut costs.
Every Chase and Chemical unit "is being tested as to its validity," said Geoffrey H. Bobroff, a consultant in East Greenwich, R.I. He added that Chase "may be thinking that it's not a logical outlet for investment sales."
Chase Manhattan Investment Services caters to well-heeled clientele not served by the company's private bank. The unit has 35 brokers and 24 other employees; all of them work out of stand-alone offices or space leased from Chase's mortgage offices.
Chase's Mr. Benzie said the bank decided to sell the brokerage offices because it wants to focus on the New York, New Jersey, and Connecticut markets, where more than two-thirds of its retail customers live.
The 135 investment sales representatives at Chase and the 130 at Chemical will not be affected by the sale, he added.
The Chase Manhattan Investment Services offices to be sold manage about $1.5 billion for 17,000 customers in and around San Francisco, Beverly Hills, La Jolla, Calif., Chicago, Denver, Dallas, Washington, Miami, and Fort Lauderdale, Fla.
