Why People's United Financial Rocketed 12% at the Open Today
Shares of Northeastern regional bank People's United Financial (NASDAQ: PBCT) rose 12% as trading got underway on Monday. That's a notable move for a bank with a somewhat sleepy history and a conservative bent. This is an institution that managed to get through the 2007-to-2009 recession (which hit the financial sector particularly hard) without needing to cut its dividend.
In fact, it has increased its dividend for 28 consecutive years at this point, though the scant 1.5% increase it has delivered over the past decade wasn't particularly impressive. However, the news that came out Monday is big, and changes everything.
No beating around the bush: People's United Financial has agreed to be acquired by M&T Bank (NYSE: MTB) in a deal that will create a bank with $200 billion in assets, 1,100 branches, and over 2,000 ATMs across 12 states in the Northeast and Mid-Atlantic regions. The total transaction cost of the all-stock deal will be roughly $7.6 billion, with People's United shareholders slated to own around 28% of the combined entity.
Source Fool.com
