(WB & GDW) Wachovia to Buy Golden West Financial
Wachovia has announced a deal to buy savings & loan giant, Golden West Financial. The deal values GDW at 1.051 shares of WB and $18.65 in cash. WB has dropped from ~$59 to the high $54s as a result of the deal.
The main criticism of the deal is that WB may be buying GDW at the peak of the real-estate market. However, WB has been around for over 40 years and has weather past real-estate storms.
Since the announcement, WB has dropped over $7 billion in market cap, while the premium for golden west amounts to only $4 billion. In addition the premium is substantially less after taking into account the WB price drop. As such, perhaps the market is over-reacting and we are seeing some large-scale institutional selling.
The main criticism of the deal is that WB may be buying GDW at the peak of the real-estate market. However, WB has been around for over 40 years and has weather past real-estate storms.
Since the announcement, WB has dropped over $7 billion in market cap, while the premium for golden west amounts to only $4 billion. In addition the premium is substantially less after taking into account the WB price drop. As such, perhaps the market is over-reacting and we are seeing some large-scale institutional selling.
posted by spinoff at
6:17 PM
0 Comments:
Post a Comment
<< Home