Germany's Dresdner Bank is said to have offered as much as $10 billion to buy PaineWebber, The Wall Street Journal said on Wednesday on the heels of reports in a German newspaper.
PaineWebber shares rose 3 3/8 to 51 3/4 Wednesday. PaineWebber officials said they had no comment on the reports.
In a note to investors, Merrill Lynch's banking analyst Judah Kraushaar on Wednesday advised holding onto the stock, saying "we could get to takeover prices in the $53-65 range."
CEO Donald Marron has repeatedly insisted that PaineWebber is not looking to merge with a larger firm, but with the brokerage's rivals teaming up to compete globally, many analysts have wondered how long Marron can keep PaineWebber independent.
Moreover, Kraushaar noted that recent volatility "could be a push for Mr. Marron to consider a sale." It is a sign, perhaps, that the few remaining big, independent brokerages are not going to maintain such strong stock valuations.
Financial stocks that Merrill tracks have dropped an average of seven percent in the last two weeks.
Written By Emily Church