Countrywide and Bank of America – What is the true value of the deal?
It is hard from individual investors sitting on the sidelines to come up with a resonable valuation. I have seen publications and websites state that the price BAC is paying for CFC is $6.90. Today I saw this article on fortune.com titled Betting against the BoA – Countrywide deal. I recommend you read it and understand what it is saying. Here is my take away from it:
If the financial climate improves between now and summer (when the deal is set to close), meaning no more major write-downs and wtf’s, CFC shareholders will probably get the $7 per share. However, if we get some more major bad news, the deal could get re-priced. Lots of moving parts here, not to mention interest rates.
– Faisal Laljee
Full Disclosure: I own BAC but my position can change anytime without notice.
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The Countrywide Conundrum
Time to Cover Countrywide
