The decision was taken due to the ongoing market fluctuations and economic stress caused by the COVID-19 pandemic. Looking ahead, analysts are optimistic about the stock’s prospect putting the average price target at $25.23, which implies 38% upside potential over the coming year. ALLY stock is dropping despite the company posting strong earnings. Ally Financial announced on Wednesday that it has terminated the acquisition and merger deal of CardWorks set for 2.65 billion. Merrick has approximately 32 billion in annual transaction volume for. In the deal, expected to close in the third quarter, Detroit-based Ally says Merrick Bank will merge into Ally Bank. CardWorks owns Merrick Bank, a major player in merchant acquiring. Since the initial announcement of the merger agreement in mid-February, Ally shares have plunged some 44%. Ally Financial (NYSE:ALLY) slumps 9.0 in premarket trading as investors digest the firm's agreement to buy CardWorks in a transaction valued at 2.65B that will give Ally an established credit. Intuit announced plans to buy Credit Karma, Lending Club plans to acquire Radius Bank, Ally Financial plans to acquire CardWorks. announced this week it will buy CardWorks Inc. Sandler raised Ally’s price target to $27 from $25 and reiterated a Buy rating, saying that he expects a "strong positive stock reaction" with Ally no longer committed to a "heavily-dilutive transaction”.
Piper Sandler analyst Kevin Barker said the termination of the CardWorks merger is "clearly a positive development" given the dilution to tangible book value combined with a very long earn-back period for a company with heavy exposure to subprime consumer credit. Bank of America Barclays BBVA USA Bread Financial Capital One CardWorks/Merrick Bank.
The transaction would have included about $1.35 billion of cash and $1.30 billion in Ally common stock. Ally Bank American Express American Honda Finance Corp. Under the terms of the initial agreement announced in February, Ally Financial offered to buy credit card and consumer finance lender CardWorks in a deal valued at about $2.65 billion.
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