10:42 AM EDT, 06/13/2024 (MT Newswires) -- Investors should not expect a higher bid for Canadian Western Bank ( CWESF ) than National Bank of Canada's ( NTIOF ) $5 Billion, or $52.24 per share, Raymond James said.

CWB's announcement that it has agreed to be acquired by NA was probably a surprise to the street, analyst Stephen Boland said in a note to clients.

"We believe similar to other bank acquisitions, National will need OSFI and Minister approval among others," Boland said.

"Hostile regulated financial services transactions are very rare in Canada, so we do not believe a superior bid would be expected (or approved) from the Big 5," the analyst said.

Boland maintained an Outperform rating on CWB and raised his price target to $52 from $37, which the analyst said is near the offer price and where he expects the stock to approach.

"National expects to realize material expense synergies over the next several years through the combination of certain platforms and funding," Boland said.

"What was not specifically stated (but may be included) was the benefit of moving CWB's loan book onto National's AIRB platform which it utilizes for most of its portfolios," the analyst said. "This is a substantial benefit that also maybe part of the rationale for the healthy premium knowing a material amount of risk-weighted assets can be released once that conversion occurs."

Boland said there could be western-based institutions (and politicians) in the middle of a Federal election (pre-election) that may not be overly positive on their "domestic bank" being acquired.

Price: 41.40, Change: -0.49, Percent Change: -1.17