Big-box retailer Target Corp. (NYSE: TD) today announced that it has agreed to sell its credit card business to TD Bank Group (NYSE: TD) for the value of its receivables, currently about $5.9 billion. In January, the retailer failed to strike a deal for the business.
Target will retain the servicing of its REDcard rewards program and its Visa card accounts. The sale includes only the loan portfolio. Under the agreement, TD will for seven years “underwrite, fund and own future Target Credit Card and Target Visa receivables in the United States.”
TD and Target will share the profits from the portfolios, with Target getting the larger piece, presumably to offset the servicing costs.
Target expects to report a third quarter pretax gain of about $150 million as a result of the sale and at closing expects to recognize an additional pretax gain of $350 to $450 million. The sale is expected to close in the first half of 2013.
Target’s shares are down about 0.3% at $62.05, in a 52-week range of $47.25 to $65.80.
TD’s shares are down 1.4% at $82.58, in a 52-week range of $65.20 to $86.56.
Paul Ausick
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s made it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.