Speculation surrounding Laurentian Bank’s future pushed its stock market value to about $2 billion, even though analysts are having trouble identifying which of the six major financial institutions in the country might be interested in the Quebec regional bank.
On the Bay Street trading floor on Wednesday, Laurentian stock was trading at $46.06, up more than 37%, or $12.53. This gave a market value of 2.03 billion to the Quebec lender. The announcement of a sale surprises some analysts who follow the activities of Canadian banks.
“We believe that the Board of Directors supported a multi-year turnaround effort under the leadership of Rania Llewellyn (the President and Chief Executive Officer), said Gabriel Dechaine, of National Bank Financial, in a note sent to clients. . Ms Llewellyn presented her vision in 2021.”
According to our information, Laurentian has retained the services of JPMorgan Chase to support it in its efforts. Approaches have even already been tried, particularly with Quebec financial institutions.
According to Mr. Dechaine, Scotiabank could be particularly interested in the activities of the Quebec bank. The analyst assigns a value of 2.6 billion to the financial institution.
“Scotia is the former employer of the president of Laurentian, which could have triggered discussions,” said Dechaine.
At Desjardins Securities, Doug Young believes that the options are limited.
Royal Bank of Canada is busy completing the acquisition of HSBC’s Canadian operations for $13.5 billion. The TD Bank has already consolidated its Canadian operations, the Bank of Montreal is digesting its most recent take on the United States (Bank of the West) and acquisitions do not seem to be among the priorities of the National Bank, estimates the analyst.
“There are only Scotia and Western Canadian Bank left, but we don’t know why either would be interested,” Young wrote in a note. Although we welcome Laurentian’s efforts to explore different options, we are having difficulty identifying the major Canadian banks that may be interested. »
Founded in 1846, Laurentian operated 58 branches at the end of its last fiscal year (October 31). Its assets are approximately 51 billion and it offers loans in Quebec, Canada and the United States. Its main shareholder is the Caisse de depot et placement du Quebec (CDPQ), which owns about 8.1% of the lender.
