Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, February 9, 2007

Article Excerpt

STATE STREET CORP. $68.35, New York symbol STT, has agreed to acquire rival Financial Services Corp. in an all-stock transaction worth $4.5 billion, or roughly 20% of State Street’s market cap of $22.7 billion. Financial Services provides custodial and related services to institutional investors. State Street investors will own roughly 85% of the combined company. The company anticipates between $625 million and $675 million in pre-tax restructuring charges. But merging the two firms’ back offices and technology platforms should save State Street between $345 million and $365 million in the first two years, and bring additional savings in future years. State Street’s stock moved down on the news, due to concerns over the company’s ability to reach its cost savings targets. It may also have trouble hanging on to some Financial Services’ clients. The stock will probably stay in a narrow range until it realizes some of the benefits of the merger. State Street is a buy. GANNETT CO., INC. $60.92, New York symbol…

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