Smith Financial to buy Home Capital Group in $1.7B deal as mortgage industry under strain

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UPDATED: Smith Financial to buy Home Capital Group in $1.7B deal as mortgage industry under strain

Last Updated Monday, November 21, 2022 4:08PM ESTCorp. in a deal that values the company at $1.7 billion as the sector feels the strain from rising interest rates and economic uncertainty.said Monday it will pay $44 in cash per share for the shares in Home Capital it does not already own, a 63 per cent premium from its $27.05 closing price Friday on the Toronto Stock Exchange.

Much higher debt service burdens, combined with eroding home prices, could lead to increased losses at lenders, and push regulators to take action, Gloyn said. Home Capital's share price has seen significant swings in recent years, topping $54 in 2015, then plunging to around $8 in 2017 amid issues of mortgage fraud.

 

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