Surprises might end PNC's bid for Riggs

[seemslikeadream]

Rohr says he's ready to scrap deal if needed
Wednesday, September 15, 2004

By Patricia Sabatini, Pittsburgh Post-Gazette

PNC Financial Services Group Chief Executive Officer James Rohr said yesterday he was prepared to scrap the pending acquisition of Riggs Bank if too many unpleasant surprises arise from an evolving money-laundering scandal.

So far, the deal for the embattled bank remains on track to be completed as planned in the first quarter next year, Rohr said. He emphasized that the acquisition was a "terrific opportunity" for PNC, giving it a springboard for expansion into one of the country's most lucrative regions.

A report by Senate investigators accused the bank of hiding dealings with former Chilean dictator Augusto Pinochet and hinted at links to terrorist financing in some of its accounts.

At the time, PNC said it expected most of Riggs' troubles to be resolved before the acquisition closed, through the sale or elimination of Riggs' international and embassy businesses.

Most recently, reports surfaced this week that Riggs was named in lawsuits seeking damages for victims of the 9/11 attacks, claiming the bank's lax money-laundering controls allowed funds to be forwarded from Saudi Arabian embassy accounts to two hijackers.

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http://www.post-gazette.com/pg/04259/379300.stm

[osaMABUSh]

1. I work at PNC and this is portrayed as the most glorious

acquisition we ever made. Sure, Riggs was a prestigious Washington, DC institution ("the bank of Presidents") but now it's a tarnished franchise with many unresolved issues.

Actually, though PNC is only in it for the money (of course) by establishing a foothold in the highly affluent NoVa and Md suburbs.

If PNC bails now it would be an embarrassment to the senior execs and may leave PNC vulnerable to be acquired if the stock sinks lower.