Marshall & Ilsley Corp. insists its highly regarded technology subsidiary, M&I Data Services, is not going public. But try telling that to Wall Street.

M&I Data executives recently took their show on the road, presenting a detailed profile of their business to groups of investors at brokerage firms in the Midwest. That was enough to set analysts buzzing that a long- rumored spinoff from Marshall & Ilsley - a $13.3 billion-asset banking company based in Milwaukee - was finally in the works.

"Why else would you go through the effort of walking around and talking about your operation unless you're an emerging company?" said one source, who attended a May 14 presentation sponsored by Robert W. Baird & Co. in Milwaukee.

The fact that M&I Data executives made their own presentations - instead of participating in separate sessions conducted by the banking company - only fueled speculation.

"They don't normally make presentations. That was unusual," said Martin McDevitt Jr., a partner at Cleary Gull Reiland & McDevitt Inc., Milwaukee.

M&I Data has long been regarded as the crown jewel of Marshall & Ilsley, which has itself been a darling of investors.

The data company is by far the largest bank-owned data processor, ranking behind only Electronic Data Systems Corp. and Fiserv Inc. on the list of firms providing data processing services to banks. The unit earned $285 million in total revenues last year, and it has grown steadily during the last five years, according to Dean Witter Reynolds Inc., New York.

As recently as last year, M&I Data officials had said they would consider a public stock offering, and the possibility has long been the subject of speculation in banking circles.

But Joseph Delgadillo, president and chief operating officer of M&I Data Services, said no such plans are in the works. He added that the recent presentations before investors were arranged at the behest of the brokerage firms, not Marshall & Ilsley.

"We plan to remain part of Marshall & Ilsley Corp. in our current form," Mr. Delgadillo said. "We don't have any changes planned."

But observers say the company would be wise to consider spinning off part of M&I Data through an initial public offering.

For one thing, raising capital would enable M&I Data to afford the acquisitions it may need to sustain its growth. Growth by acquisition has become a hallmark of most of the top bank outsourcing firms in recent years.

"There has been an explosion in the growth of several players in this industry, and M&I Data has to compete with these companies by continuing to grow," says Anthony A. Lombardi, vice president and equity analyst at Dean Witter, which has underwritten stock offerings for the bank.

"With a spinoff they would have their own currency to grow by acquisition," Mr. Lombardi said.

Shareholders in M&I Data's parent stand to benefit from a spinoff. General accounting rules allow Marshall & Ilsley Corp. to spin off as much as 20% of M&I Data and still consolidate its books. But revenues and expenses for the technology unit would be definable.

"It would enhance the value of the holding company," said Mr. McDevitt. "And the market would be able to place a value on the underlying business."

Investors appear to support similar public offerings, analysts said. Typically, technology firms trade at 20 to 30 times earnings, and last year, the average price-to-earnings ratio for the 20 publicly traded bank data processing firms was 37.9, according to Dean Witter.

Some analysts, however, point to a downside of any public offering by M&I Data.

"It could make the banking unit vulnerable to acquisition," says Kay C. Lister at Keefe, Bruyette & Woods, New York. "There's not an overwhelming need to get it done tomorrow."

Brian Tracey contributed to this article.

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