(Toronto) A cloud of uncertainty formed over TD Bank’s $13.4 billion takeover of First Horizon on Wednesday when it was revealed that the Toronto-based bank was seeking to push back from again the closing date of the operation.
In a regulatory filing, First Horizon Bank said on Wednesday it had been told by TD that the latter did not expect to complete the deal by the current deadline of May 27 and was therefore considering pushing back that date.
Tennessee-based First Horizon said in its filing that TD could not provide a new closing date, and there was no guarantee the deal would go ahead.
“There can be no assurance that an extension will ultimately be agreed upon or that TD will meet all regulatory requirements to obtain the necessary regulatory approvals to complete the pending merger with TD,” First Horizon said.
TD said it could not comment on the situation because it is in a period of silence before the release of its quarterly results on Thursday, but indicated that it remained committed to the transaction.
The delays don’t necessarily come as a surprise, but the timing of the disclosure of this new postponement, just weeks after the banks agreed to a three-month extension, raises the possibility that the deal will not go through. said analyst John Aiken, of Barclay, in a note.
The additional delay does put the deal in doubt, argued National Bank analyst Gabriel Dechaine, but it could be a good thing for TD if the deal were to fall through.
“While this turn of events is clearly seen as negative for (First Horizon), the implications for TD are arguably more positive,” he said in a note.
Investors weren’t keen on the deal from the start, and market conditions have deteriorated since it was announced a year ago, Dechaine said. Abandoning the deal would free up capital for TD, he said.
Bank of Montreal also faced delays in its acquisition of Bank of the West for US$16.3 billion, but the deal eventually closed on 1er February, about three months later than originally planned.