The pending merger of BankAmerica Corp. and NationsBank Corp. has certainly caught the eye of James B. Lee Jr., Chase Manhattan Corp.'s outspoken investment banking chief.
One day after the deal was announced, Mr. Lee, a Chase vice chairman, fired off a memo to his troops urging them to get on the horn with corporate customers of the two merging banks.
"I want calls made ASAP on those names promoting the security/stability of working with a nonmerging bank and/or an alternative bank if Nations and BofA are the two leads," Mr. Lee wrote. "Most of this will occur in media and health care-but be on the lookout elsewhere."
"Let's be on our toes to capitalize," the memo continued. "I want to hear about all key opportunities so I can be involved."
The "highly confidential" memo, which is now circulating among bankers at NationsBank and BankAmerica, reiterates and defends Chase's dominance in syndicated lending-a business closely identified with Mr. Lee.
In the memo he allows that the new BankAmerica would jump "way up in the overall league tables." But he points out that Chase remains on top in "the 'true' Admin Agent league table," where its lead "continues to be considerable."
Industry rankings prepared by Securities Data Co. give full credit to all lead agents on a loan. When BankAmerica and NationsBank announced their plans to merge, Chase executives asked Securities Data to run numbers for them giving full credit to administration agents only, according to a source.
Mr. Lee declined to comment. But a Chase spokesman compared the missive to a locker-room pep talk delivered by a coach.
"Jimmy was trying to connect with our employees, more like Knute Rockne than Milton Friedman," the spokesman said. "Even class acts like Michael Jordan engage in a little competitive talk when the game is on the line."
Some of Chase's rivals who have seen the memo called it defensive. "It's the type of memo you write when you're feeling threatened," one said.
On a pro forma basis, a combined NationsBank-BankAmerica would have generated about $94 billion of syndicated loans in the first quarter, according to Securities Data. That is just $24 million short of Chase, the perennial market leader.
In the memo, Mr. Lee demonstrates an allegiance to the Big Apple that would make the city's mayor, Rudolph Giuliani, proud.
"I do not believe it is possible to create a global wholesale firm which does not have its headquarters or at least the core of its business in New York," he wrote.
"This new combination will be run out of North Carolina and California, and I just don't think this works if your aspiration is to serve our global clients. Ironically, to this point, the two CEOs held their press conference in New York (not in Charlotte or San Francisco)," he added.
Some bankers outside of New York were clearly miffed.
"By this estimate, most of the Fortune 500 companies are nonplayers," one said.
"There's no question that New York is the media capital of the world," added another. "So if you're going to announce something like this, that's where you do it."
Rivals said Mr. Lee's pitch to BankAmerica's and NationsBank's customers was hypocritical, as Chase itself is the result of several bank mergers. Indeed, many banks tried a similar tactic on Chase's clients when it was going through its own large mergers a few years back, according to a source.
Mr. Lee pooh-poohed other aspects of the planned marriage.
"This deal does little or nothing to advance the perception that the merged company is nothing more than a bigger taker of deposits and lender of money," Mr. Lee wrote, adding that "both banks suffer from this same commercial banking image."
A source close to the NationsBank-BankAmerica deal accused Mr. Lee of throwing stones from a glass house.
Chase is having "a similar issue," the source said. "The only difference here is that they're in New York. And it doesn't matter any more where you come from. Capital is key."
Though the memo demonstrates that the biggest potential merger ever of two U.S. banks is clearly on Mr. Lee's mind, those who know him say he is probably not losing any sleep over the new BankAmerica. As one market observer put it, "I don't think anything scares Jimmy Lee."