- TD Bank is eyeing a possible deal to acquire Wall Street brokerage firm Cowen, Bloomberg reported Friday.
- Discussions surrounding the deal are private, but unnamed individuals close to the matter told the outlet that TD is in talks with advisers to consider the tie-up, but no decisions have been made. TD reportedly could back out of the deal at any time.
- Shares of Cowen rose 20% in less than half an hour after markets opened Tuesday morning after the holiday weekend, to a valuation of $805 million, Bloomberg reported.
A TD deal for Cowen would mark another move by a Canadian lender to expand U.S. operations — in a year that has seen several.
TD announced in February that it would buy Memphis, Tennessee-based First Horizon Bank in a deal valued at $13.4 billion. That transaction would extend TD’s footprint into the Southeast, and establish the firm as the sixth-largest retail bank in the U.S.
TD reportedly was among the banks considering buying Bank of the West from BNP Paribas. But another Canadian lender — BMO — swooped in and agreed to acquire it for $16.3 billion. The spoils would let BMO would tap into markets on the West Coast, and gain footholds in Los Angeles and San Francisco.
If a deal is signed between TD and Cowen, the acquisition would expand the Toronto-based bank’s investment banking arm, TD Securities. Cowen has acted as a bookrunner on 55 initial public offerings in the past year, and served as the lead adviser on five of those launches, according to Bloomberg.
Since taking TD’s reins in 2014, CEO Bharat Masrani has kept a watchful eye on opportunities to expand further into the U.S.
“With respect to major mergers and acquisitions in the United States, we’re very open,” Masrani said in an interview with Bloomberg in March 2021.
Canadian banks are expanding southward at a time when other foreign financial institutions are retreating from the U.S.
U.S. Bank announced last September it would pay $8 billion to acquire MUFG Union Bank from Japanese automaker Mitsubishi. A few months earlier in May, London-based HSBC sold 80 of its 148 U.S. branches to Providence, Rhode Island-based Citizens Bank, and 10 to Los Angeles-based Cathay Bank. In November 2020, PNC announced it agreed to purchase Spanish lender BBVA’s U.S. arm in a deal worth $11.6 billion.