Q: I understand that TD will face a fine of some large amount, and I feel they can overcome the fine. My concern relates to TD getting a fine plus curtailment of doing acquisitions in the US for a period of time say five years. Should not a curtailment of US acquisitions be the most worrisome for investors?
Mike
Mike
5i Research Answer:
TD has already been blocked once on a US takeover. A further curtailment could hurt its growth prospects, but that is not necessarily to say it will be bad for the stock. Sentiment is fickle, and investors may see any curtailment as a chance for TD to 'get its house in order' and/or clean up other operations with less distraction. Spending less on M&A of course would also free up capital. Thus, we would not consider it the most concerning aspect of this whole saga.