The lenders said in a statement Thursday that they “entered into a mutual agreement” to terminate their 2022 merger. TD will make a $200 million cash payment to Memphis-based First Horizon, on top of a $25 million reimbursement due as part of the merger agreement.Sign up to receive daily headline news from the Calgary Herald, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
TD agreed to buy First Horizon for $13.4 billion in early 2022. It would have been its largest deal ever and seen it expand its presence in the US Southeast. The combination would give it more than 400 new branches in the country and add more than 1.1 million individual and business customers across 12 states.
The deal valued First Horizon at just over double its tangible book value. The KBW Regional Banking Index traded at a weighted average of 2.05 times tangible book at the time the deal was announced, but now has fallen to a 1.4 times, according to data compiled by Bloomberg. Even before the market turmoil, doubts about the deal had been swirling for months amid concerns that US regulators may block the deal. President Joe Biden has been urging tougher oversight of mergers and Senator Elizabeth Warren criticized the Toronto-based bank over its sales practices.
The deal has already been hit by delays with the Canadian lender saying in March that it didn’t expect to receive the necessary regulatory approvals by May 27 — as it had projected in early February — and it couldn’t provide a new projected closing date.
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