TD takeover of First Horizon in doubt as it looks to extend close again

By Ian Bickis, Canadian Press | March 1, 2023 | Last updated on March 1, 2023
2 min read
A TD Bank building in Calgary Downtown stock photo
iStock/Marvin Samuel Tolentino Pineda

TD Bank Group’s US$13.4-billion takeover of First Horizon is in doubt as it looks to further extend the closing date of the deal.

First Horizon said in a regulatory filing Wednesday that TD has informed the bank it does not expect to close the deal by the current May 27 deadline and so is looking to extend.

Tennessee-based First Horizon says in its filing that TD cannot provide a new projected closing date, and there is no guarantee the deal with go through.

“There can be no assurance that an extension will ultimately be agreed or that TD will satisfy all regulatory requirements so that the regulatory approvals required to complete the Pending TD Merger will be received,” the bank said.

TD says it can’t comment because it’s in a quiet period ahead of its earnings release Thursday but that it remains committed to the transaction.

Delays aren’t necessarily a surprise, but the timing of the disclosure, just weeks after the two banks agreed on a three-month extension, does increase the likelihood of the deal not being completed, said Barclays analyst John Aiken in a note.

The further delay does put the deal in doubt, but it could be good for TD if it falls through, said National Bank analyst Gabriel Dechaine.

“While this turn of events is clearly viewed as a negative for First Horizon, the implications for TD are arguably more positive,” he said in a note.

Investors weren’t that keen on the deal to begin with, while market conditions have deteriorated since it was announced a year ago and losing the deal would free up capital for TD, he said.

BMO also faced delays in its US$16.3-billion acquisition of Bank of the West, but ultimately closed it Feb. 1, about three months later than it originally expected.

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Ian Bickis, Canadian Press

Ian Bickis is a reporter with The Canadian Press, a national news agency headquartered in Toronto and founded in 1917.