Ryan Beck Falls Short

Ryan Beck continues to dog its parent company BankAtlantic(BBX Quote).

Shares of BankAtlantic plunged Tuesday, after the Ft. Lauderdale, Fla.-based bank said it was selling its ailing investment banking arm to Stifel Financial(SF Quote) for a sum considerably less than many on Wall Street had anticipated.

The sale of Florham Park, N.J.-based Ryan Beck comes six months after BankAtlantic pulled a planned IPO for the brokerage firm, citing adverse market conditions for its decision. At the time, many on Wall Street predicted the bank would seek a buyer for Ryan Beck in a deal that could fetch up to $300 million.

But in selling Ryan Beck to Stifel in an all-stock deal, BankAtlantic is getting about $96 million based on the Monday closing price of Stifel's shares. The deal calls for BankAtlantic to receive 2.53 million of Stifel's common stock.

"People thought that the Ryan Beck side of BankAtlantic would bring in more," says Michael O'Boyle, a bank stock trader at First Horizon National's FTN Midwest Research Securities. "The stock price is telling you that Stifel got a better deal than BankAtlantic did."

Shares of BankAtlantic were down 53 cents, or 3.9%, to $13.02 in midday trading, while Stifel's stock is up $2.95, or 7.7%, to $41.04.

"They probably got a fair price for it," says Joe Fenech, an analyst at Sandler O'Neill. "At the end of the day it's an unprofitable investment bank. It lost money in 2006. It would have been marginally profitable in '04-'05. Marginally profitable investment banks sell at book value."