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APRIL 9, 2001

INSIDE WALL STREET

Is Weill After AmEx?

 
By Gene G. Marcial
Gene G. Marcial

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It looks as if American Express (AXP ) might be Sandy Weill's last hurrah. Whispers persist that the Citigroup Chairman is determined to acquire AmEx, of which he was president in the early 1980s. Some of his intimates say Weill had expected to end up running AmEx, succeeding Chairman Jim Robinson. Instead, Weill lost out in a power struggle. But he has gone on to bigger and better things. And now that he heads a financial giant with assets of $900 billion and a market value of $230 billion, buying AmEx, with assets of $155 billion and a market cap of $53 billion, seems within reach.

"Weill has had a lot of triumphs, but this will be the glorious prize that had eluded him," says Lewis Rabinowitz of investment firm R.L. Lewis. He thinks talks are going on. At 39, AmEx stock is ripe for the picking, he notes--way below its October high of 63.

But why would Weill bother? For starters, AmEx would be "a great strategic win," says Dan Goldfarb of money-management firm David L. Babson, which owns 2 million shares. Combining 53 million high-spending AmEx card members with Citibank's cardholders would give Citigroup gigantic scale--in addition to the world-famous AmEx name.

Goldfarb figures the AmEx card and travel operations are worth 30 a share, its financial advisory unit 15, and its American Express Bank, about 10. Tom Goggins of John Hancock Financial Industries Fund, which owns 2.1 million AmEx shares, puts AmEx' value higher. On fundamentals alone, he says, it's worth 70 a share.

Citigroup isn't the only one after AmEx: Morgan Stanley Dean Witter and American International Group are also in pursuit, says Goldfarb. A Weill spokeswoman declined comment. AmEx says the company does not comment on rumors.


By Gene G. Marcial
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