KeyCorp’s stock experienced a significant boost on Monday morning following the announcement of a substantial $2.8 billion investment from the Bank of Nova Scotia. Scotiabank will acquire approximately 163 million shares of KeyCorp by the first quarter of 2025, contingent upon regulatory approval.
The investment will occur in two stages: an initial $800 million purchase at the end of this month, followed by an additional $2 billion investment pending approval from regulators and the Federal Reserve. Scotiabank will acquire the shares at a fixed price of $17.17 each, representing a 17.5% premium over KeyCorp’s closing price of $14.61 on Friday.
KeyCorp’s CEO, Chris Gorman, highlighted the investment as a “unique opportunity to raise capital on attractive terms.” He emphasized that, while the bank was comfortable with its current capital position, the infusion of capital would accelerate its capital and earnings improvement plans and enhance its strategic position.
Following the announcement, KeyCorp’s shares surged approximately 13%, reaching their highest levels since early 2023. In contrast, Scotiabank’s shares fell by about 4%.
This move marks a significant development for KeyCorp, providing a substantial boost to its capital reserves and strategic positioning.
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