- TD Bank (TSX:TD) announced its decision to sell its entire equity investment in Charles Schwab (NYSE:SCHW) as part of a review following the landmark U.S. fine
- TD currently holds 184,678,738 shares of Schwab’s common stock, representing a 10.1 per cent economic ownership stake
- Schwab will purchase 19,235,208 shares from TD for a total purchase price of US$1.5 billion
- Toronto-Dominion Bank stock (TSX:TD) last traded at C$86.00
TD Bank (TSX:TD) announced its decision to sell its entire equity investment in Charles Schwab (NYSE:SCHW) as part of a review following the landmark U.S. fine.
TD currently holds 184,678,738 shares of Schwab’s common stock, representing a 10.1 per cent economic ownership stake.
In a media release, the bank said it would sell 165,443,530 shares through a registered offering at a price of US$79.25 per share. Schwab will also purchase 19,235,208 shares from TD for a total purchase price of US$1.5 billion. The sale is expected to close on February 12, 2025, pending conditions.
This transaction is anticipated to generate net proceeds of approximately C$20 billion after taxes and underwriting discounts. It will also create C$15 billion in Common Equity Tier 1 (CET1) capital, equivalent to 247 basis points of CET1 capital released. TD plans to deploy C$8 billion of the proceeds towards a share buyback program, pending regulatory approval.
Net of the share buyback program, the transaction will create approximately 116 basis points of CET1 capital. The remaining proceeds will be invested in TD’s businesses to support customers, drive performance, and accelerate organic growth. The transaction is expected to be accretive to TD’s earnings per share on a run-rate basis.
Schwab has filed a registration statement, including a prospectus, with the U.S. Securities and Exchange Commission for the offering related to this transaction.
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group. TD is the sixth largest bank in North America by assets and serves more than 27.5 million customers. TD had $1.97 trillion in assets on April 30, 2024.
Toronto-Dominion Bank stock (TSX:TD) last traded at C$86.00 and has climbed 9.41 per cent since this time last year.
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