CHARLOTTE -- The support for merging Interstate/Johnson Lane with Wachovia Corp. was overwhelming Tuesday as almost all of the brokerage's shareholders approved the deal.
At a special meeting, some 97 percent of voting shares were cast in favor of the brokerage firm's $230 million merger with the country's 17th largest bank holding company.
Before announcing the results, IJL chairman Jim Morgan shared a conversation he had earlier in the morning with his wife.
"She asked me if this was an emotional day," he said. "I said, `Yes it is. But the great thing is that I don't have to walk in there this morning the least bit reluctant.' "
Moments later, Morgan announced that the merger had been overwhelmingly approved.
Another strong indicator was that of the firm's 1,500 employees, only four have left the company since the plan was unveiled in October, Morgan said.
"We're closing one chapter with Interstate/Johnson Lane no longer being a separate company," he said. "I feel the chapter ahead of us is just as exciting."
The deal should be completed as soon as April. Federal regulators are expected to approve the merger sometime in March, said IJL spokeswoman Jane Shoemaker.
Unveiled in October, the stock transaction will give Winston-Salem-based Wachovia the chance to join the industry trend of buying brokerages to enter the lucrative investment banking business.
Three other large North Carolina banks -- NationsBank, First Union and BB&T -- all have either bought or agreed to buy regional brokerages since late 1997.
The boards of directors of both companies approved the merger agreement on Oct. 27. The agreement calls for a tax-free exchange of Wachovia common shares for all shares of IJL common stock.
The per-share exchange ratio will be determined at the time of closing and will be based on the ratio of $32 per IJL share to the average closing price per share of Wachovia's common stock over the five trading days prior to closing, the companies said in a statement.
Upon closing, IJL will be integrated into Wachovia through a new broker-dealer subsidiary, with Morgan as chief executive officer.
Wachovia and IJL predicted few job cuts as a result of the merger. Wachovia established an employee retention pool of $23 million in restricted stock for key employees of IJL.
Meanwhile, Interstate/Johnson Lane reported its fourth-quarter earnings at the meeting. The firm earned $3.5 million in the three months ended Dec. 31, an increase of 20 percent over the $2.9 million it earned in the same quarter a year ago.
IJL, based in Charlotte, is a regional financial services firm whose subsidiaries provide securities brokerage, investment banking and underwriting, and investment consulting services to individuals, institutions, municipalities and corporations.
Wachovia Corp., an interstate bank holding company with dual headquarters in Atlanta and Winston-Salem, had assets of $63.9 billion at the end of last year.
"The closer we move toward the merger, the more excited we are about the opportunities for our clients, our employees and our shareholders," Morgan said. "There is no doubt in our minds that Wachovia is the ideal partner for IJL as we move into the new century."
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