Toronto-Dominion Bank’s (TD) $13.4 billion U.S. takeover of First Horizon Corp. (FHN) has been complicated by the ongoing fallout of several bank failures in America.
First Horizon’s stock fell 33% on March 13 before trading in the security was halted due to extreme volatility.
The stock ended the trading session down 20% at $16.04 U.S. per share. That’s the biggest decline in First Horizon’s stock since the 2008 financial crisis and puts the share price 35% below TD’s takeover offer.
TD can walk away from the deal to acquire First Horizon until May of this year.
Some analysts expect that executives at TD will either abandon the current deal or renegotiate the price given the steep decline in First Horizon’s share price.
The TD-First Horizon transaction had already been viewed as uncertain due to several regulatory issues even before the collapse of Silicon Valley Bank (SIVB) and Signature Bank (SBNY).
Adding to the complexity is the slump in TD’s own share price, which has declined nearly 10% in the past week to trade at $80.90 per share.
Another complicating factor is that TD owns 10% of the voting stock in Charles Schwab (SCHW), which has fallen 32% in the last five trading sessions. In the past, TD has sold Charles Schwab stock to raise capital. But that strategy too has been thrown into doubt.
TD has not commented on its deal to acquire First Horizon in recent days. But in the past, the lender has repeatedly said that it remains committed to the acquisition.
TD Bank’s stock is down 18% over the past 12 months.
