Another US regional bank First Horizon's stock tumbles after merger collapses
First Horizon and TD Bank have called off a $13 billion deal that would have formed Americas sixth-largest bank, adding to the turmoil sweeping the countrys regional lenders, a media report said.
IANS
May 4, 2023 11:07
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New York, May 4 (IANS) First Horizon and TD Bank have called off a $13 billion deal that would have formed Americas sixth-largest bank, adding to the turmoil sweeping the countrys regional lenders, a media report said.
Caught up in the worst banking crisis since 2008, First Horizon's share price has plunged about 40 per cent over the past couple months, falling well below the $25 per share that TD offered when the takeover was announced in February 2022, CNN reported.
The stock closed at $15.05 a share on Wednesday and plunged another 40 per cent in morning trading on Thursday after the deal was mutually abandoned by the banks, the report said.
First Horizon is a regional lender in the southeast United States and would have helped Canada's TD expand south of the border. But regional banks have been losing the confidence of investors and customers since the March collapse of Silicon Valley Bank and Signature Bank.
On Monday, a third regional bank, First Republic, failed and JPMorgan purchased most of its assets. A fourth, PacWest Bank confirmed earlier on Thursday that it's looking for a financial lifeline.
First Horizon, though, said it remains stable, cash-rich and diversified.
"While today's announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability," First Horizon CEO Bryan Jordan said in a statement.
TD said in a statement that the companies called off the merger because of an unexpectedly long regulatory approval process. Without a timetable for approval, the companies began to question whether the deal would get regulators' blessing at all. TD said the regulatory issue was for "reasons unrelated to First Horizon".
Although TD didn't directly cite the banking crisis or First Horizon's crumbling market value as the reason for abandoning the purchase, its CEO Bharat Masrani said in a statement that the decision provided "clarity" to its customers and shareholders, CNN reported.
