DLJ To Raise $300 Million Of Equity Via Private Sale Of Shares To Equitable And AXA
Donaldson, Lufkin & Jenrette, Inc. said today that it will sell up to $300 million of newly issued common stock to its parent companies, Equitable Companies Inc. and AXA Group in a private transaction. Equitable will purchase up to $200 million of DLJ shares and AXA will purchase up to $100 million of shares. The purchase price will equal the average closing price of DLJ's common stock on the New York Stock Exchange for the three-day period beginning Friday, July 17 and ending Tuesday, July 21, 1998. The agreement among the companies, however, provides that the purchase price of the shares will not be greater than $63.66 or less than $57.59.
Currently, on an undiluted basis, Equitable and its affiliates are the beneficial owners of approximately 72 percent of the outstanding shares of DLJ common stock (including restricted stock units). After the transaction, their aggregate undiluted ownership will increase to approximately 73 percent, and DLJ's equity capital will increase from $2.5 billion to $2.8 billion. On a pro forma basis, the transaction will increase DLJ's book value per share from $18.12 at June 30, 1998 to between $19.77 and $19.84 per share, depending upon the final purchase price.
As of June 30, 1998, DLJ had approximately 117 million shares outstanding. Depending upon the final purchase price, that number will increase by approximately five million shares. The total number of shares to be issued will not exceed five percent of the common stock outstanding on the date of issuance of the new shares.
Joe L. Roby, DLJ's president and CEO, says, "DLJ's revenues and net income are the strongest they have ever been in the firm's 39-year history. Results for the first six months of 1998 approximate our full-year earnings for 1996 and exceed our full-year performance for every year before then. Return on equity for the first six months of this year was a healthy 26.4 percent. Additional equity capital will facilitate the expansion of our businesses in the United States and also in Europe, where we have launched a major initiative. We appreciate this vote of confidence by AXA and the Equitable in the future of DLJ.''