{"id":4254,"date":"2023-05-04T17:08:55","date_gmt":"2023-05-04T21:08:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/first-horizon-stock-plunges-as-td-abandons-13-4-billion-takeover\/"},"modified":"2023-05-04T17:08:57","modified_gmt":"2023-05-04T21:08:57","slug":"first-horizon-stock-plunges-as-td-abandons-13-4-billion-takeover","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=4254","title":{"rendered":"First Horizon Stock Plunges As TD Abandons $13.4 Billion Takeover"},"content":{"rendered":"
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This March 20, Toronto-Dominion\u2019s CEO Bharat Masrani previously said he was fully committed to the bank’s $13.4 billion takeover of Memphis-based First Horizon \u2014 despite its stock trading 40% below TD’s offer price in March.<\/p>\n

TD now abandoned the deal. Is the stock of $81 billion (first quarter 2023 assets) First Horizon a buy?<\/p>\n

I would not touch this falling knife. The delay in regulatory approval that TD cited as the reason for canceling the deal suggests that there is something wrong here. Yet First Horizon\u2019s financial statements suggest a far less precipitous decline than the one that preceded SVB\u2019s collapse in March.<\/p>\n

TD Terminates First Horizon Merger Deal<\/h2>\n

TD is paying up to shut down its deal to acquire First Horizon \u2014 announced in February 2022 \u2014 citing uncertainty regarding the timing of the deal\u2019s approval by U.S. regulators. According to the Wall Street Journal<\/em>, TD made the decision due to the uncertainty of \u201cobtaining the regulatory prerequisites to push the merger through.\u201d<\/p>\n

TD is clearly getting the better of First Horizon. TD \u2014 whose stock rose slightly in pre-market trading \u2014 will pay First Horizon $225 million \u2014 89% of which is a termination fee and 11% a fee reimbursement. First Horizon is the bigger loser as its stock plunged 43% in pre-market trading on May 4 \u2014 wiping some $3.5 billion off of its stock market capitalization.<\/p>\n

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Silicon Valley Bank Collapse Heightened Deal Stress<\/h2>\n

The collapse of SVB lowered the chance that the TD-First Horizon deal would get to the finish line. While different in its particulars, the outline of what happened here seems to follow many elements of 2023\u2019s bank failure pattern.<\/p>\n

How 2023\u2019s bank failure pattern works<\/h3>\n

Bank failures this spring have followed a common path:<\/p>\n