City National (CYN) to be Acquired by Royal Bank of Canada in $5.4B Deal
Shares of City National Corporation (CYN) were trading up +15.27 or +20.48 percent to $89.84 per share in Thursday's premarket. The company announced early this morning it had entered into a definitive agreement to be taken over by the Royal Bank of Canada in a deal valued at approximately $5.4 billion. City National Corp. shares closed at $74.57 per share, down -0.07 or -0.09 percent in Wednesday's regular trading session.
Toronto and Montreal, Canada based Royal Bank of Canada, also known as the Banque Royal du Canada is the largest financial establishment in Canada and the largest Canadian company by revenue and market capitalization. The company serves approximately 18 million clients in Canada and 51 other countries and has over 73,000 employees worldwide. The company has over $940.5 billion CAD in assets and had net income of $9.0 billion last year.
The agreement, which was approved by the boards of both companies, will have the Royal Bank of Canada pay approximately $93.80 for each City National Corp. share in a combination of cash and stock based on City National's closing stock price yesterday. RBC will pay on average about $47.25 in cash and 0.7489 of an RBC common share for each share of City National common stock.
City National stockholders will have the option of receiving consideration either in RBC common shares or cash, which is subject to certain adjustments and limitations. The aggregate consideration on the RBC end of the deal is for 44 million shares of RBC common shares and $2.7 billion in cash.
City National Chairman and CEO Russell Goldsmith said in a statement that, "We're very enthused about merging with RBC, this combination is a compelling opportunity. It will deliver significant value to our shareholders along with the opportunity to participate in the future growth of RBC. It will promote both continuity and growth, enabling our outstanding team of colleagues to maintain and strengthen City National's value proposition. It will improve what we can do for our clients and the communities we serve. My colleagues and I look forward to joining forces with this company that has tremendous financial strength and considerable resources and capabilities not only in the United States but around the world.
The deal is expected to close by the end of the 2015 calendar year and is still subject to approval by City National shareholders and the required regulatory approvals. City National stock is trading a few dollars under the takeover price and will be in play until receiving final approval from City National stockholders.
Other News About City National
City National Corporation's 2014 Net Income Grows to $255.8 Million, Up 11 Percent From 2013; Fourth-Quarter 2014 Net Income Totals $66.0 Million, Up 20 Percent
Company announced earnings after the takeover deal was announced early this morning.
City National Corporation Declares Preferred Stock Dividends
Company will pay a quarterly cash dividend of $13.75 for its Series C Preferred stock.
Other Stocks in the News
IBM analysts say turnaround could take years
Company has missed revenue estimates in 12 of the last 15 quarters.
The Aging of Abercrombie & Fitch
CEO Michael Jeffries plans to leave the company after 22 years.