The Successful Investor Hotline – Friday, December 17, 2010

Article Excerpt

PLEASE NOTE: This is our last Hotline for 2010. Our next Hotline will go out on Friday, January 7, 2011. BANK OF MONTREAL, $58.00, Toronto symbol BMO, fell 6% on Friday after it agreed to buy Marshall & Ilsley Corp. (New York symbol MI), which provides banking and financial services through 374 branches in Wisconsin, Indiana, Missouri, Minnesota, Kansas, Arizona and Florida. The purchase doubles the size of Bank of Montreal’s U.S. retail-banking division. The bank is paying roughly $4.1 billion U.S. in stock for Marshall & Ilsley. That’s equal to 12% of Bank of Montreal’s $32.9-billion market cap. It aims to complete the purchase by July 31, 2011. Issuing shares for Marshall & Ilsley will hurt Bank of Montreal’s capital ratios. To comply with new rules that require banks to maintain enough capital to absorb future loan losses, the bank will also sell $800 million of new common shares. In all, the extra shares will increase the total outstanding by about 14%. Marshall &..