Financial Stocks Trading Higher; SWS Group, Hilltop Holdings Agree to $261 Mln Tie-Up


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Financial stocks were starting the new quarter on the upside with the NYSE Financial Sector Index adding 0.3% and the S&P Financial 100 Index climbing about 0.2%.

In company news, SWS Group ( SWS ) surged Tuesday, with shares of the investment and financial services provider jumping over 5% after the company accepted a $261 million buyout offer from Hilltop Holdings ( HTH ).

The deal values SWS shares at $7.88 each, consisting of 0.2496 of a HTH share and $1.94 in cash for each share they now own. The companies expect to close the deal by the end of the year, subject to regulatory and SWS shareholder approvals and other closing conditions.

HTH previously invested in SWS three years ago through a $50 million senior unsecured loan. Connected with the loan, HTH received warrants to purchase nearly 8.7 million SWS shares at $5.75 each. HTH currently owns around 2.56 million SWS shares, or about 7.8% of its outstanding shares, according to a Feb. 14 securities filing. That stake would expand to over 24% if HTH fully exercises its warrants.

SWS shares were ahead nearly 5% at $7.85 each in recent trade, earlier topping out at $8.06 a share - matching some of its best share prices since mid-2010. HTH also rose, last trading at $24.17 a share, up 1.6%.

In other sector news,

(+) BGCP, (+5.5%) Sees Q1 revenue at the top of its forecast range of $410 mln to $440 mln. The Street is looking for $429.44 mln in revenue during the three months ended March 31.

(-) NDAQ, (-2.0%) Jefferies issues a Hold rating and a $40 price target in new coverage, noting the company is unlikely to soon increase its shareholder payouts above its current $0.13 per share quarter dividend.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities
More Headlines for: SWS , HTH

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