"We believe that Wells Fargo is one of the few large banks with the interest and balance sheet to take down the entire business," writes KBW.
The bank research firm calculates that a buyout of the whole unit would cost $2.1 billion, roughly a 5% premium to its book value. Such a move would add 7% or 20 cents, to Wells Fargo's 2012 earnings per share, lifting overall earnings to $3.05 a share, and adding an additional 19 cents to 2013 EPS.
"Overall, we believe that the market would view this as a good deal for Wells Fargo if it were completed given the accretion and relative size," writes KBW.
GM may also look to re-buy Ally's auto lending operations to help its dealers provide sales-generating auto loans, according to Reuters. In 2010, GM bought subprime auto and truck lender AmeriCredit for $3.5 billion and renamed the unit GM Financial. Ford Motors (F) currently operates a full-service lending unit called Ford Motor Credit.Ally Bank's insurance unit has the most well documented sale plans, with reported interested parties that include Warren Buffet-run Berkshire Hathaway (BRK.A), however the business has been a hindrance to the Treasury's IPO plans, as its ResCap mortgage unit faced increasing litigation tied to its foreclosure and loan modification practices in 2011. In February, Ally Bank and four of the nation's largest banks including JPMorgan, Bank of America (BAC), Wells Fargo and Citigroup (C) agreed to a $25 billion settlement on the litigation. That litigation iced a June 2011 IPO plan that was reported to include $6 billion of shares. Bidders interested in ResCap include Fortress Investment Group (FIG), Cerberus and a co-bid from Centerbridge Partners and Leucadia National (LUK), according to Reuters. In December, Bloomberg reported that Berkshire Hathaway may take an equity stake in the unit, which if facing a restructuring. With $500 million in Ally and ResCap bonds, Berkshire is one of ResCap's largest creditors. Overall, the unit's largest bondholder is Pacific Investment Management. An equity stake in ResCap may come via a pre-packaged bankruptcy where bonds are converted to share holdings. Previous Ally owners like Cerberus, which had large Ally stakes prior to government bailouts still have significant share positions. Cerberus owns 8.9% of Ally Bank, while General Motors Trust has a 5.9% stake and General Motors has a 4% holding.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV