Is Manulife Really Planning to Buy CIBC?

With Manulife Financial Inc. (MFC) plopping C$500-million in the hat Canadian Bank of Commerce (CM) passed around this week to shore up its balance sheet, rumors again swirled that the insurance giant may move to acquire the bank.

The two were whispered to be eyeing each other up a few years back, only to be thwarted by regulators.

In a note to clients on Thursday morning, Ms. Cohen wrote:

We continue to believe that this is not a strategic investment for [Manulife] but one in which Manulife believes that the combination of yield and potential capital appreciation makes it attractive.

She believes other potential acquisitions in the U.S. market, in wealth management for example, would be more attractive to Manulife.

In her view, Manulife is well-positioned to ride out the current market volatility, and maintained her "market outperform" rating and C$45.75 target price.