First Horizon (NYSE:FHN) stock tumbled 34% in Thursday afternoon trading after it and TD Bank Group (NYSE:TD) ended their previously announced merger agreement with uncertainty over obtaining regulatory approvals looming more than a year after the two companies agreed to the deal. Earlier in the session, FHN had dropped as much as 40% and had sunk by half during premarket hours.
TD Bank (TD) stock gained 0.7%.
Under the terms of the termination agreement, TD (TD) will make a $200M cash payment to First Horizon (FHN). That’s in addition to the $25M fee reimbursement due to First Horizon under the agreement. The banks said Thursday’s termination of the deal was by mutual agreement.
As recently as April 13, TD Bank (TD) CEO Bharat Masrani had said the bank was committed to completing the acquisition of First Horizon (FHN) as the process for obtaining regulatory approvals dragged on.
The shares of First Horizon Series G preferred stock that TD Bank (TD) purchased will continue to reflect a conversion price of $25 per share. Neither party will pay any other fees or have any other liabilities to each other related to the merger agreement.
TD Bank (TD) first agreed to acquire First Horizon (FHN) in February 2022 for $13.4B in cash.