Keefe Bruyette & Woods Calls Off IPO

When specialty investment bank Keefe Bruyette & Woods cancelled its IPO Monday morning, some Wall Street wags figured there was only one reason for such a move -- the firm must be entertaining a takeover offer.

The New York-based firm, a leader in bank-related merger advisory, was planning to sell about 4.7 million shares for 17 to 19 per share through underwriters led by Donaldson Lufkin & Jenrette (DLJ Quote).

A short memo sent to the underwriters and to firm employees stated the board had "elected to cancel" the IPO and would "review all other strategic alternatives," according to two people who saw the memo. KBW's board met late last week and decided to cancel the deal, says one KBW employee, requesting anonymity. Firm officials didn't return two phone calls. ...