TD Bank Group has announced its intent to sell its entire equity investment in The Charles Schwab Corporation.
The sale will be executed through a registered offering and a share repurchase agreement with Schwab, while TD will maintain a business relationship through its Insured Deposit Account (IDA) Agreement.
TD currently holds 184.7 million shares of Schwab’s common stock, representing approximately 10.1% of economic ownership. As part of the transaction, Schwab has agreed to repurchase $1.5 billion of its shares from TD, contingent upon the completion of the offering.
A preliminary prospectus supplement regarding the offering will be filed by Schwab with the US Securities and Exchange Commission (SEC). TD Securities and Goldman Sachs will serve as joint book-running managers for the transaction.
“As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment,” said Raymond Chun, group president and CEO of TD Bank Group. “We are very pleased with the strong return we are generating on the Schwab shares we acquired in 2020.”
The bank plans to use approximately $8 billion of the proceeds to repurchase its own stock, with the remaining funds directed toward investments aimed at supporting customers, enhancing performance, and fostering organic growth.
TD emphasized its commitment to prudent capital management and operational strengthening. Further details regarding the bank’s normal course issuer bid were released in a separate statement.
The offering is being conducted under Schwab’s shelf registration statement, which has been filed with the SEC. Additional details on the offering can be obtained through TD Securities and Goldman Sachs.
TD Bank Group will hold a conference call on February 11, 2025, at 8:00 a.m. ET to discuss the transaction and other business updates. The call will be webcast live and available for replay on TD’s investor relations website.
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