As you might recall when bbt acquired colonial share price quickly jumped 10%. I get the feeling over the last 2 days there's been some chatter in the market place on this subject which might explain some of the price movement in the last 2 days.
At the right price, rbc acquisition could be a good deal for bbt. Rbc has around $13 billion in loans - about $4 billion are construction and development and arm loans. My gut estimate is that fair value for their portfolio is about $11 billion, around $1.3 billion less than their book value. My gut says tangible book value is around $2 billion after the loan scrub. Bbt could probably generate around $280 million in annual cost reduction after tax from branch consolidation.
I don't think pnc is a serious bidder so I would not price rbc much above tangible book.
There are plenty of other places for bbt to invest their money - i.e. specialized lending which is growing nicely, yields 12% margins and 2 to 3% loan losses.
"BB&T finance chief Daryl Bible has a busy calendar. So busy that he will no longer be speaking at Deutsche Bank's financial-services conference on Wednesday. But does that mean the U.S. bank is finalizing a deal?
Conference absences always prompt speculation that something's afoot. In this case, the question is whether BB&T is near to buying Royal Bank of Canada's U.S. operations. The 430 bank branches could fetch $3 billion. A BB&T spokeswoman says the bank tried to reschedule Mr. Bible's appearance and couldn't."
Just too much overlap in the footprints. To realize the full potential of this acquisition, BB&T would have to close a number of RBC branches in their biggest markets. That just isn't BB&T's style. They portray themselves as a "community bank". You don't lay people off in your own community for a quick profit.
You should not compare Colonial with RBC... First, RBC is not negociating under the gun. Second, i dont beleive your 1.3 B mark down. Finaly, PNC will very likely make a competitive bid and dont rule out USB or STI.
Price movement in the last few days are more linked with the politics around the US deficit and debt seiling. The elected clowns (both republicans and democrats) are not understanding the real outcomes. International investors are staying away of US markets (or shorting) and this will continue until these outcomes are clarified.
There are also many corporate decisions that are stalled right now just because of these uncertainties and this is extremely bad for US economy. Expect a long time frame before any deal concerning RBC.