Dean Witter Weighs Merger Possibilities

Dean Witter, Discover & Co. would consider buying rival broker Paine Webber Group Inc. if its stock declines, Dean Witter Chairman and Chief Executive Philip J. Purcell told analysts.

Combining Dean Witter Reynolds, the securities subsidiary of Purcell’s company, with Paine Webber would create the biggest U.S. retail brokerage firm in terms of brokers, with more than more than 14,000 salesmen and $285 billion of assets under its control. The firm would be bigger than Merrill Lynch & Co., now with 13,700 brokers.

Purcell said Paine Webber would be a “one of the best fits” among possible brokerage acquisitions, according to analysts who attended a breakfast meeting with him. Purcell made his remarks in answer to analysts’ questions about potential mergers.

But Purcell indicated Paine Webber’s stock would have to drop substantially in value before a merger would make sense.

Purcell gave no indication he’s actively exploring a merger with Paine Webber, the fourth-largest U.S. securities firm. “Dean Witter regularly looks at all potential opportunities as part of our strategic review process,” the firm said in a statement.