Schwab's plan to purchase just got a lot cheaper -
In November, Charles Schwab announced plans to buy TTDA for a little over $26 billion in current market value. Not really talked about? The terms of the deal.
The acquisition, which plans to go through by Q4 of 2020, was basically a "stock swap". From Reuters:
"As part of the deal, expected to close in the second half of 2020, Ameritrade stockholders will get 1.0837 Schwab shares for every share held, or $52.23 based on Schwab’s Friday close. Schwab shareholders will hold 69% of the combined company, while TD Ameritrade stockholders will have an 18% stake. The remaining roughly 13% stake will be held by Toronto-Dominion Bank (TD.TO), TD Ameritrade’s largest shareholder."
As of today, we're running below the announced deal value, and it's not getting any better. Ultimately the strike price Schwab will pay may be at a huge discount to what they previously thought they were buying TD for.
The acquisition, which plans to go through by Q4 of 2020, was basically a "stock swap". From Reuters:
"As part of the deal, expected to close in the second half of 2020, Ameritrade stockholders will get 1.0837 Schwab shares for every share held, or $52.23 based on Schwab’s Friday close. Schwab shareholders will hold 69% of the combined company, while TD Ameritrade stockholders will have an 18% stake. The remaining roughly 13% stake will be held by Toronto-Dominion Bank (TD.TO), TD Ameritrade’s largest shareholder."
As of today, we're running below the announced deal value, and it's not getting any better. Ultimately the strike price Schwab will pay may be at a huge discount to what they previously thought they were buying TD for.
Pierce Crosby
GM, Americas @ TradingView
GM, Americas @ TradingView
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