With the ink barely dry on Morgan Keegan & Company's $200mn settlement with the SEC, FINRA and 5 state regulators, MKC's parent company put the brokerage firm on the block.  [See C-I's WWW story on the SEC and FINRA complaints.]

Regions Financial, Morgan Keegan’s parent, announced that it was putting Morgan Keegan up for sale in a effort to raise money to repay its loan from the government’s Troubled Asset Relief Program.  Regions still owes the government $3.5 billion, more than any other bank that remains in the bailout program.  The bank has retained Goldman Sachs to advise it on a sale.

“The resolution of this legacy regulatory matter gives Regions greater flexibility with respect to the Morgan Keegan franchise and the ability to explore opportunities that are consistent with our strategic and capital planning initiatives.”  -- Statement by Grayson Hall, Regions Financial CEO.

Regions agreed in December 2000 to acquire Morgan Keegan for $789 million. Based in Memphis, Morgan Keegan has more than 300 office in 20 states.

Regions, which has a market value of $7.9 billion, has itself been viewed as a possible takeover target. In the wake of PNC Financial Services’ $3.45 billion deal for the U.S. subsidiary of the Royal Bank of Canada this week, Bank of America-Merrill Lynch analysts noted the speculation and wrote that Regions “could potentially provide considerable upside in a takeout” if it was to repay TARP by year-end.

For further details, go to :   [Dealbook, 6//22/11]