"I don't buy the rumors," said Stifel Nicolaus analyst Christopher Mutascio in an email.
KeyCorp's stock rose over three percent Thursday on a DealReporter article that said that bank was in discussions with the Canadian bank. Speculation that KeyCorp is a target has accelerated since CEO Henry Meyer announced his retirement in November 2010.Beth Mooney, formerly vice chair of KeyCorp, is stepping up to replace Meyer in May 2011. "Beth Mooney will want a chance to run the company when she takes over in May," said Morgan Keegan & Co.analyst Robert Patten. Patten predicts that KeyCorp will pay back $2.5 billion in money owed to the U.S. Treasury Department's Troubled Asset Relief Program (TARP) shortly after Mooney takes office. KeyCorp has yet to receive regulators' approval to repay the bailout, but has been discussing a repayment with regulators. Patten said that if KeyCorp sold prior to repaying TARP,"the credit market and loan portfolio would be prohibitive
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