Yahoo Finanza Morgan Stanley to Acquire Eaton Vance for About $7 Billion; Target Price $68 in Best Case
Morgan Stanley, an American multinational investment bank and financial services company, said on Thursday that it will acquire a leading provider of advanced investment strategies and wealth management solutions Eaton Vance for about $7 billion.
Under the terms of the deal, Eaton Vance shareholders will get $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of nearly $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.
The deal also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism. In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources.
The deal is anticipated expected to close in the second quarter of next year.
At the time of writing, Morgan Stanley’s shares traded 1.12% higher at $49.26 on Thursday; however, the stock is down about 4% so far this year.
Executives’ comments
“Eaton Vance is a perfect fit for Morgan Stanley,” said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley. “This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments.”
“Over many years, Eaton Vance has delivered above-market growth by aligning our business with leading trends in asset management,” said Thomas E. Faust, Jr., Chief Executive Officer of Eaton Vance. “By joining Morgan Stanley, we will be able to further accelerate our growth by building upon our common values and strengths, which are focused on our commitment to investment excellence, innovation and client service. Bringing Eaton Vance’s leading brands and capabilities under Morgan Stanley creates a uniquely powerful set of investment solutions to serve both institutional and retail clients in the U.S. and internationally.”
Morgan Stanley stock forecast
Thirteen analysts forecast the average price in 12 months at $57.62 with a high forecast of $68.00 and a low forecast of $45.00. The average price target represents a 17.45% increase from the last price of $49.06. From those 13, nine analysts rated “Buy”, four rated “Hold” and none rated “Sell”, according to Tipranks.
Deutsche Bank raised their price target to $53 from $49; Citigroup upped their stock price forecast to $58 from $56; UBS raised the target price to $57 from $52; Berenberg increased their target price to $45 from $36; Oppenheimer raised their target price to $66 from $60; D.A. Davidson upped the target price to $64 from $58 and BMO raised the target price to $68 from $65.
Other equity analysts also recently updated their stock outlook. Piper Sandler raised the target price to $51 from $48; KBW raised their target price to $58 from $53; Evercore ISI upped their target price to $59 from $54; RBC upped their stock price forecast to $55 from $50. At last, Credit Suisse increased their stock price forecast to $58 from $46.
Analyst view
“Morgan Stanley’s focus on less capital-market dependent operations and planned buyout of E*Trade will support profitability. Steady capital deployments reflect its strong balance sheet position,” said equity analysts at Zacks Research, who also gave a price target of $50.
“(But) Uncertainty about the performance of the capital markets remains a major concern for Morgan Stanley. Persistently increasing expenses are expected to hurt the bottom line to an extent in the near term.”
This article was originally posted on FX Empire
