PrefBlog

Bank of Montreal is buying Marshall & Ilsley:

Bank of Montreal agreed to buy Marshall & Ilsley Corp. for about $4.1 billion in stock to double its U.S. deposits and branches in the largest takeover by Canada’s fourth-biggest bank.

Bank of Montreal will pay 0.1257 of its own share for each share of Marshall & Ilsley, the Toronto-based bank said today in a statement. The deal values Marshall & Ilsley at $7.75 a share, 34 percent higher than yesterday’s closing price of $5.79 on the New York Stock Exchange.
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Toronto-Dominion Bank, the country’s second-biggest lender, may reach an agreement to acquire Chrysler Financial Corp., the auto-loan company owned by Cerberus Capital Management LP, three people with knowledge of the matter said this month.

Marshall & Ilsley has posted eight straight quarterly losses while Bank of Montreal has reported six consecutive quarters of profit growth, a streak unmatched by Canada’s five other large lenders. Marshall & Ilsley traded as high as $40 in 2007.

The takeover has a price-to-book ratio of 0.61 for Marshall & Ilsley, less than half of the median ratio of 1.4 for 33 regional, commercial bank deals since the start of 2009, according to Bloomberg merger data.

Australian Banc Capital Securities Trust, briefly discussed here on November 30, and best known for having a kangaroo as part of its logo, which is really, like, awesome, you know? has closed its initial public offering:

The Fund raised gross proceeds of $145,815,760 from the sale of 14 million Class A Units and 581,576 Class F Units, respectively, at a price of $10.00 per Unit. The Fund has granted to the agents an over-allotment option, exercisable for a period of 30 days from the closing date, to offer an additional 2.1 million Class A Units.

The Class A Units are listed on the Toronto Stock Exchange (“TSX”) under the symbol AUZ.UN. Class F Units will not be listed on a stock exchange but may be converted into Class A Units on a weekly basis.

$146-million. With total agents’ fees, by my calculation, of nearly $7.5-million. Sometimes all one can do is shake one’s head.

Moody’s downgraded Ireland:

The yield on the Irish 10- year Irish bond rose to 8.60 percent, the highest since Dec. 2, and German bund yields fell. Credit-default swaps insuring Irish debt climbed for a third day, the longest streak this month.
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Portuguese bonds also fell as Ireland’s credit rating was cut five levels to Baa1 from Aa2 by Moody’s, with further downgrades possible, as the government struggled to contain losses in the country’s banking system. European Union leaders are meeting in Brussels after agreeing yesterday to create a permanent crisis-management mechanism.

It was a good day on the Canadian preferred share market today, as preferreds finally caught a bid after a long string of losses. TXPR total return is still down about 1.46% on the month-to-date, though, so don’t upgrade your New Year’s champagne plans just yet. PerpetualDiscounts were up 34bp and FixedResets gained 13bp on continued elevated volume.

This entry was posted on Friday, December 17th, 2010 at 10:33 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.