MarketWatch (01/11/08); Goldstein, Steve
Charlotte, N.C.-based Bank of America reports that it has reached an agreement to acquire Countrywide Financial, in a deal that will position it as the biggest mortgage originator and servicer in the United States. The $4 billion stock transaction, slated to close in the third quarter, calls for each Countrywide share to be converted to 0.1822 of a share in Bank of America. The takeover is not expected to impact Bank of America’s earnings per share this year, but likely will bolster EPS next year. By 2011, Bank of America expects to fully realize $670 million in after-tax cost savings tied to the Countrywide deal
Countrywide Shares Soar on Reports of Talks
Washington Post (01/11/08) P. D1; Tse, Tomoeh Murakami; ElBoghdady, Dina
Bank of America is holding talks with Countrywide Financial to acquire the nation’s largest mortgage lender, people close to the situation told the Wall Street Journal. The sources suggested a deal could emerge “very soon” but added that there is a possibility it could be delayed or even fall through. A deal has been rumored for months, as Bank of America made a $2 billion equity investment in Countrywide in August; and Friedman, Billings, Ramsey Group analyst Paul Miller believes the bank could pick up the Calabasas, Calif.-based company at a bargain, considering the mortgage lender may be close to bankruptcy. Investors welcomed the news, pushing up shares in Countrywide 52 percent, or $2.64, to a closing price of $7.76 in Thursday trading.