Stock Of First Horizon Plummets After The Merger Agreement With TD Bank Is Mutually Terminated

On Thursday morning, it was jointly announced by First Horizon Corp. and TD Bank Group that they have decided to terminate their merger agreement, which had a value of $13.4 billion when it was initially announced more than a year ago. 

‍

Following the announcement, First Horizon shares were observed to have plunged by 45% during premarket trading. Prior to this, the company's stock had already been trading below the $25-per-share deal price, which indicated investor skepticism regarding the deal's likelihood of going through.

‍

In a release, the companies stated that "TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon". 

‍

Given the uncertainty surrounding the timeline and possibility of obtaining these regulatory approvals, both parties mutually agreed to end the merger agreement.

‍

Under the terms of the termination agreement, TD Bank has agreed to make a $200 million cash payment to First Horizon, in addition to a $25 million fee reimbursement related to the merger agreement. While First Horizon Chief Executive Bryan Jordan acknowledged the announcement was unexpected, he stated that the company would continue on its growth path from a position of strength and stability. 

‍

TD Bank Chief Executive Bharat Masrani expressed disappointment with the resolution but acknowledged that the announcement provided clarity for the bank's colleagues and shareholders. He also emphasized that TD Bank would continue to pursue a strong, growing franchise in the United States.

‍

Although the planned deal, which was initially announced in February 2022, had a value of $13.4 billion, there had been doubts about whether it would eventually be finalized.

‍