For many a month Wall Street has known that "Something has to be done about Transamerica." Last week the big holding company's 217,000 shareholders received a lengthy letter from their bustling chairman, Elisha Walker. It told what will be done about Transamerica.
No More Banks. It was Founder Amadeo Peter Giannini's idea that Transamerica should take the lead in nation-wide branchbanking. Last year the annual report said hopefully: "It is now generally conceded that the trend of public opinion is increasingly favorable to the extension of branchbanking." But Mr. Walker's letter of last week reported: "There is no apparent likelihood that nation-wide branchbanking will be authorized by law in the near future." He then confirmed the recent rumor that Transamerica will sell its controlling interest in banks, chief of which are Bank of America, New York, and Bank of America. California. During the week stockholders were assured that no hurried sale will be made, a buyer will be awaited. Current reports were that Bank of America. New York, would be merged with another Manhattan institution, that some Bank of America, California, stock would be sold, some distributed.
No More Investment Banking. The letter explained that the banks will be divorced from their investment affiliates. The most important of these is Bank-america-Blair Corp., an important investment banking house. It is expected that the securities business carried on by this company will pass to a new corporation known as Blair Securities Corp., and that the former partners of Blair & Co. will acquire it from Transamerica Corp. as an investment trust of the general management type.
No More Goodwill. Last year the total assets of Transamerica Corp. were $1,117,000,000. Last week drastic write-downs were made. All marketable securities were valued at market prices; shares of controlled companies were written down to their net asset value; all goodwill and going concern value were eliminated, also the value of insurance in force in the case of insurance companies. The result was a total asset value of only $302,117,000, a net asset value (assets minus liabilities) of $173,091,000.
No More Dividends, The Transamerica quarterly dividend has been cut from 25¢ to 10¢ this year. But even 40¢ a year requires almost $10,000,000 on Transamerica's 25,000,000 shares. Last week the dividend was passed.
No More Gianninis. Most surprising of all the changes made last week were those in management. Eight new directors were added, 22 old ones dropped. New directors included Frederic Winthrop Allen, Charles Edward Cotting and George Murnane, all partners of Lee, Higginson & Co. They also included presidents of two companies friendly with Lee, Higginson: Frederic C. Dumaine of Amoskeag Manufacturing (cotton mills) Co. and Charles W. Nash of Nash Motors Co. This indicated that the influential house of Lee, Higginson & Co. has a stake in the future of Transamerica, and more than any of the other changes answered the question of "What will be done about Transamerica?"