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TORONTO - TD Bank Group (TSX: TD) (NYSE: TD) announced on Monday its plans to sell its entire equity investment in The Charles Schwab Corporation (NYSE: NYSE:SCHW).
The divestiture will occur through a registered offering and a share repurchase by Schwab. Despite the sale, TD will maintain its business relationship with Schwab via the Insured Deposit Account Agreement.
TD holds approximately 184.7 million shares of Schwab’s common stock, which translates to a 10.1% economic interest. As part of the transaction, Schwab has committed to repurchasing US$1.5 billion of its shares from TD, contingent on the completion of the offering.
Raymond (NSE:RYMD) Chun, Group President and CEO of TD Bank Group, stated, "As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment. We are very pleased with the strong return we are generating on the Schwab shares we acquired in 2020."
TD Bank Group plans to allocate C$8 billion from the proceeds to repurchase its own stock. The remaining funds will be invested back into the company to support customer and client services, enhance performance, and foster organic growth.
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