Tuesday, July 12, 2005

TD Banknorth Buying Hudson United

US$1.9 billion deal extends bank’s reach in U.S. northeast

Investment Executive, 12 July 2005

TD Banknorth Inc., which is now part of TD Bank Finanical Group, is buying Hudson United Bancorp for approximately US$1.9 billion in cash and TD Banknorth stock.

The two firms announced today that they have signed a definitive agreement for TD Banknorth to acquire Hudson United.

“This acquisition is consistent with our growth strategy and will significantly expand our franchise in both Connecticut and eastern New York while providing us with a presence in the fast-growing markets of New Jersey and Philadelphia," said William Ryan, TD Banknorth’s chairman, president and CEO, in a release.

The deal will create a regional financial services company with 590 branches, 751 ATMs and over US$26 billion in deposits across 8 northeastern states.

Two Hudson United directors will be added to the TD Banknorth board of directors.

Under the terms of the agreement, Hudson United shareholders will have the right, subject to proration, to elect to receive cash and/or TD Banknorth common stock, in either case having a value equal to US$21.07 plus the product of 0.7247 times the average closing price of the TD Banknorth common stock during a 10-trading day period ending on the fifth trading day prior to the closing date.

Based on the closing price of the TD Banknorth common stock on July 11, 2005, the deal is valued at US$42.78 per Hudson United share and the aggregate merger consideration consists of approximately 51% stock and 49% cash. It is anticipated that the common stock consideration received in the transaction will be tax-free to Hudson United shareholders.

The cash for the transaction will be financed through TD Banknorth’s sale of approximately 29.6 million shares of TD Banknorth common stock to TD Banknorth’s parent company, TD Bank Financial Group, at a price of US$31.79 per share.

Based on the number of TD Banknorth shares outstanding as of June 30, 2005, TD Bank’s percentage ownership of TD Banknorth will decrease slightly after giving effect to the transaction. However, through TD Banknorth share repurchases or, subject to meeting regulatory requirements, open market purchases, TD has indicated its intent to at least maintain its ownership of TD Banknorth at the level prior to the acquisition of Hudson United or, as market conditions warrant, to potentially increase its position.

“We are pleased to support Bill Ryan and his team in this strategic acquisition,” said Ed Clark, president and CEO of TD Bank. “This transaction delivers on our shared vision for growth and marks a significant milestone in TD Banknorth’s expansion strategy.”

The deal is subject to approval by shareholders of Hudson United and TD Banknorth, as well as regulatory approval, and is expected to close in the first quarter of 2006.