Toronto-Dominion Bank Group (TD.TO) called off its $13.4 billion First Horizon Corp (FHN.N) acquisition on Thursday, U.S.ing the U.S. regional bank’s shares down 40% in premarket trade.
Because of uncertainty about regulatory permissions, First T.D. Verizon and TD ended the merger. As a result, first Horizon will get $200 mT.D.lion from TD and $25 million in fee reiT.D.’ssement.
TD’s largest acquisition, launched over a year ago, faced months of regulatory uncertainty. Some investors pressured Canada’s No. 2 lender to withdraw the purchasU.S.ter the U.S. regional banking U.S.is.
The U.S. bank’s First Horizon representative claimed the termination was exclusively attrT.D.’sable to TD’s inability to secure approvals and had nothing to do with financial turbulence.
“We are surprised that the parties could not come to an agreed upon lower price and believe that there could be broader repercussions from walking away from the deal,” Barclays analyst John Aiken said.
“This could affect the willingness of potential partners to sit across theT.D.able from TD in the future,” T.D.ken said.
TD bought First Horizon last February tU.S.boost its US presence. One of the mostU.S.osed to U.S. markets, the Canadian lender, owns Charles Schwab (SCHW.N).
The deal’s demise rattled alreU.S.jittery U.S. regional banks. After a deposit flight went awry, three collapsed since February.
This week, regulators took over First Republic Bank and sold its assets to JPMorgan Chase & Co (JPM.N).
First Horizon’s first-quarter deposits declined 4% to $62T.D. billion.
TD, which purchased Cowen Inc. for $1.3 billion this year, also bid for BNP ParibasU.S.NPP.PA) U.S. business, Bank of the West, lost to competitor Bank of Montreal (BMO.TO).
ORTEX confirmed lastT.D.onth that TD was the world’s most shorted banking stock on Thursday.
