TD Bank’s planned acquisition of First Horizon is facing uncertainty as regulatory approval lags, causing bank stocks to plummet. On March 1, TD Bank announced that it does not expect to receive regulatory approval in time to complete the $13.4 billion all-cash acquisition of First Horizon by May 27, 2022, the outside date for the deal’s completion. As a result, First Horizon’s shares fell by 11% that day.
The drop in First Horizon’s share price continued on March 10, with the stock trading at its lowest level since the deal was announced on February 28, 2021. First Horizon’s minor drop pales in comparison to other banks associated more closely with SVB Financial, which suffered much steeper losses.
TD Bank CEO Bharat Masrani did not deny the possibility of a price change for First Horizon as the deal drags on and passes the termination date. Masrani stated that negotiations are ongoing and that further details would be provided once the negotiations are finalized.
The acquisition has also faced opposition from U.S. lawmakers. In June 2021, Senator Elizabeth Warren sent a letter to the Office of the Comptroller of the Currency, asking the regulator to block the transaction over concerns about aggressive sales tactics.
The delay in regulatory approval and potential price change for First Horizon have raised concerns among investors, causing bank stocks to plummet. While the negotiations continue, the fate of the acquisition remains uncertain.