Today State Street Corp. (STT) announced a $4.18 Billion acquisition of Investor Financial Services Corp. (IFIN). State Street's stock closed down $4.67 or 6.5% and IFIN rose $12.85 or 27.37% on the news.
As I noted in my post dated 12.22.2006 titled State Street Raises Dividend...But STT's dividend has been slowing. In the post I suggested maybe the slower dividend growth was an indication by the board of directors that STT's business was slowing. I have noted in other posts that slower dividend growth could be an indication the board/company might have other uses for the cash, such as acquisitions or stock buybacks. In any event, was STT's slower dividend growth rate a signal of a pending acquisition? Those companies that begin to exhibit slower dividend growth warrant further research by investors. An investor must be comfortable with the business strategy of these investments.
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