State Street to Buy Investors Financial for $4.5b in Stock, A 38% Premium

State Street Corp, the world's #3 asset manager, announced this morning it has signed a definitive agreement to buy Investors Financial Services Corp. for about $4.5 billion in stock. Investors Financial shareholders will receive 0.9-share of State Street stock for each of their shares based on Friday's State Street close of $71.75, an $18.05 (38%) premium over its $46.95 closing price. The merger would put more than $14 trillion under State Street custody, up from its present $12t. State Street said that pending the deal it would become "the leading investment-service provider to the offshore and hedge-fund industries and gain capabilities for servicing the growing private-equity fund market." Both companies focus on meeting the needs of institutional investors with hedge/mutual fund services, securities finance, and cash and transition management, and both operate out of Boston, MA. IFIN shares are up $15.05, and STT shares are down $3.70 in pre-market trading.

Sources: Press Release, MarketWatch, Bloomberg
Commentary: State Street will hold a investor conference call at 9:00 EST. • Seeking Alpha coverage of Mergers & Acquisitions
Stocks/ETFs to watch: State Street Corp (STT), Investors Financial Services Corp. (IFIN). Competitors: Mellon Financial Corp. (MEL), Merrill Lynch & Co. Inc. (MER), Bank of New York Company Inc. (BK), JPMorgan & Chase Co. (JPM), Wachovia Corp. (WB), Citigroup Inc. (C), Bank of America Corp. (BAC). ETFs: PowerShares Dynamic Banking (PJB), streetTRACKS KBW Bank (KBE), PowerShares Dynamic Financial (PFI), PowerShares Financial ETF (PRFF), Financial Select Sector SPDR ETF (XLF)

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Comments

[Chris Thomas]

Does State Street really know what they're doing?

That's quite the premium.