Laurentian Bank of Canada shares soared more than 30 per cent in early trading Wednesday after The Globe and Mail reported that the country’s ninth-largest lender is exploring a sale.
Laurentian has been discussing the possibility of a deal with several suitors since late June. The bank has hired JPMorgan Chase & Co. and Osler, Hoskin & Harcourt LLP as its advisers. Laurentian is also believed to have received a bid from an undisclosed rival bank. “We believed [Laurentian Bank’s] board was committed to a multiyear turnaround effort under CEO Rania Llewellyn,” National Bank of Canada analyst Gabriel Dechaine said in a note to clients. “Nonetheless, a challenging growth outlook for Canadian banks and a stock price that has consistently hovered below book value may have forced the Board’s hand.”
A takeover of Laurentian Bank would provide a lender with expansion opportunities in Quebec and Ontario, as well as in the southern United States where it has a commercial equipment financing business. Laurentian has 57 branches and $51-billion of assets, focusing largely on commercial loans – aWhile any of the banks could be a potential buyer, some are likelier bidders than others. Bank of Nova Scotia has previously said that it is looking to bolster its presence in Quebec and British Columbia.