Word on Street Has GE Ready to Sell Kidder Unit
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NEW YORK — Speculation mounted on Wall Street on Monday that General Electric Co. is getting Kidder, Peabody & Co. in shape to unload its retail brokerage operations.
PaineWebber Group Inc. was rumored to be looking at the Kidder retail unit, which consists of about 1,300 retail brokers, securities analysts and traders.
Traders also speculated that Travelers Inc., parent of broker Smith Barney Inc., might be interested as well. However, several Wall Street sources were highly skeptical of the rumors.
Asked for comment, a Kidder spokesman said any news would be announced in a timely and appropriate fashion. A spokeswoman for PaineWebber declined to comment, and Travelers executives were not immediately available.
The rumors were sparked by a report in the Wall Street Journal that Kidder would eliminate as many as 750 jobs and withdraw from foreign exchange, stock options and futures-related businesses.
It would amount to its most significant restructuring since GE bought the brokerage firm in 1986.
GE has seen massive turmoil at the brokerage, having accused its former chief government bond trader, Joseph Jett, of creating $350 million in fictitious profits. Jett has denied the allegations.
A Wall Street source said one of the knottier issues in any sale is indemnifying a buyer so there is no legal or financial responsibility for any of the problems stemming from Kidder’s fixed-income department.
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