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Nomura also doesn't like odds of Schwab/LPL Financial deal

Published 11/18/2016, 12:27 PM
Nomura also doesn't like odds of Schwab/LPL Financial deal
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  • The rumor that Schwab (NYSE:SCHW) has interest "comes as a bit of a shock," says Nomura's Steve Chubak, calling deal hurdles for public acquirers "insurmountable," and believing a P/E rollup to be the more likely outcome.
  • What could make a Schwab buy somewhat more likely, he admits, is the idea that the DOL fiduciary rule could be softened under a Trump administration/GOP Congress.
  • Other headwinds might also abate, as LPL Financial (NASDAQ:LPLA) would be one the largest beneficiaries of higher interest rates.
  • Chubak and team's analysis sees roughly 11% accretion potential should Schwab buy, "however, the uncertainty around the realization and timing of these benefits suggests that attractive deal economics are far from certain and that takeout consideration by SCHW seems remote."
  • Previously: Citi's Katz plays down chance of Schwab buying LPL Financial (Nov. 17)


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