Toronto-Dominion Rises After Citizens IPO ReportSean B. Pasternak
Toronto-Dominion Bank, Canada’s second-biggest lender, rose the most in seven months following a report Royal Bank of Scotland Group Plc plans to sell a stake of Citizens Financial Group Inc. in an initial public offering.
Toronto-Dominion rose 1.8 percent to C$85.80 at 10:54 a.m. in Toronto, the biggest intraday gain since July 27. About 2.26 million shares traded hands, the seventh-biggest trading volume in Canada today. It rose the most in the broader S&P/TSX Financials Index of 44 companies, which advanced 0.5 percent.
Royal Bank of Scotland will announce it intends to sell a 15 percent to 25 percent stake in Rhode Island-based Citizens when it reports earnings on Feb. 28, a person with knowledge of the plans said Saturday. Toronto-Dominion earlier held informal talks to buy Citizens, the New York Post reported Aug. 3, without saying where it got the information.
“Market concern over a potential acquisition of Citizens has weighed on the TD quote for the past six months,” Sumit Malhotra, an analyst at Macquarie Capital Markets wrote in a note today to clients.
Malhotra said in a Nov. 6 note that “the financial and operating risk associated with a purchase the size of Citizens” would be difficult for Toronto-Dominion, which has more bank branches in the U.S. than it does in Canada.
Toronto-Dominion is scheduled to release fiscal first-quarter earnings this week.