Post by
Dibah420 on Mar 01, 2023 4:55pm
BMO negative on FHN merger
First the $b ponzi penalty now this!
March 1, 2023 | 09:03 ET~ TD Bank
TD-TSX TD-NYSE Rating Market Perform Price: Feb-28 $90.85 Target $98.00 Total Rtn 12% TD
Does Not Expect to Complete FHN Merger by May 27, 2023 Bottom Line: In First Horizon's 10-K, released today (link), it highlighted that on the pending TD merger, it has been informed by TD that it does not expect to receive the necessary regulatory approvals to complete the merger by May 27, 2023. We view this as a negative development for TD’s U.S. growth strategy.
Key Points • On February 9, 2023, FHN and TD had agreed to extend the merger termination date to May 27, 2023 (from February 27, 2023).
• In its 10-K filing, FHN outlined that subsequent to the extension, TD had informed FHN that it does not expect to receive the necessary regulatory approvals in time to complete the merger by the new deadline.
• Further, TD cannot provide a new projected closing date at this time. TD has initiated discussions with FHN regarding a potential further extension.
• As expected, there is also verbiage included that there can be no assurance that an extension will ultimately be agreed to or that TD will satisfy all regulatory requirements.
• With other similar transactions having been approved in the U.S. more recently, it is fair to question whether the delay is a TD-specific regulatory issue.
• Our model currently includes a ~5% EPS lift from FHN results in F2023 and ~10% lift in F2024, which may be at risk.
• Overall, we view this as a potential negative development for TD’s U.S. growth strategy, which could weigh on the stock until the uncertainty is resolved.