Capital One and Discover stockholders approve merger

MCLEAN, Va. - Stockholders of Capital One Financial Corporation (NYSE: NYSE:COF) and Discover Financial Services (NYSE: NYSE:DFS) have overwhelmingly voted to approve the proposed acquisition of Discover by Capital One. The affirmative votes were cast at each company’s respective Special Meeting of Stockholders, signaling stockholder confidence in the merger. Capital One’s stock has shown remarkable strength, with a 45% gain over the past six months and currently trading near its 52-week high of $208.63, according to InvestingPro data.

In a significant move for the financial industry, more than 99.8% of Capital One shares and over 99.3% of Discover shares that were voted favored the transaction. These figures represent 85.1% and approximately 81.6% of the total outstanding shares of common stock for Capital One and Discover, respectively, as of the record date, December 27, 2024.

The stockholder approval marks a critical milestone in the merger process of the two companies, which are both known for their consumer-centric financial solutions. The completion of the merger is expected in early 2025, pending further regulatory approvals from the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, among other customary closing conditions.

Previously, the Delaware State Bank Commissioner approved the acquisition on December 18, 2024. This approval, along with the stockholder vote, moves Capital One closer to finalizing the acquisition, which is anticipated to expand its financial offerings and market reach.

Capital One, headquartered in McLean, Virginia, is a financial holding company with $362.7 billion in deposits and $490.1 billion in total assets as of December 31, 2024. The company provides a wide range of financial products and services and is listed on the New York Stock Exchange. InvestingPro analysis shows Capital One maintains a GOOD overall financial health score and has consistently paid dividends for 31 consecutive years. With a market capitalization of $76.8 billion and annual revenue of $27.4 billion, Capital One appears slightly undervalued based on InvestingPro’s Fair Value analysis. For deeper insights into Capital One’s valuation and financial metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Discover, a digital banking and payment services company, is one of the largest card issuers in the United States. It operates the Discover Global Network, which includes the Discover Network, PULSE ATM/debit network, and Diners Club International.

The information about this merger is based on a press release statement. Further details on the agreement can be found at the dedicated merger website, www.capitalonediscover.com. Investors seeking detailed analysis of Capital One’s financial performance, including over 30 additional key metrics and ProTips, can access comprehensive research through InvestingPro.

In other recent news, Capital One Financial Corp disclosed its monthly charge-off and delinquency rates for January 2025, providing investors with key credit performance indicators. In a parallel development, Capital One and Discover Financial Services are preparing for special stockholder meetings to discuss their merger agreement, following unanimous board approval. Legal challenges have been encountered in the merger process, with three lawsuits alleging disclosure deficiencies in the joint proxy statement/prospectus.

The company also announced a $31 million incentive award for CEO Richard D. Fairbank, based on the company’s 2024 performance. This award, approved by the company’s Compensation Committee and independent board members, is entirely at-risk, dependent on Capital One’s performance. The company has also set a compensation plan for 2025 that mirrors the structure used in 2024.

In a recent development, Treasury Secretary Scott Bessent was appointed as the acting director of the Consumer Financial Protection Bureau (CFPB), a move expected to impact credit card companies including Capital One. Analyst Jaret Saiberg from TD Cowen commented on the potential implications of this appointment.

Lastly, Capital One closed a public offering of $1.75 billion in subordinated notes, with a syndicate of underwriters including Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley (NYSE:MS) & Co. LLC managing the transaction. All these are recent developments in the company’s operations, providing valuable insights for investors.

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