Wednesday, January 11, 2006

TD's US Bank Bid a Go

The Toronto Star, Stuart Laidlaw, 11 January 2006

Portland, Maine - In meetings this morning here and in New Jersey, Toronto Dominion’s U.S. unit approved a $1.9 billion (U.S.) deal to take over Hudson United Bancorp.

Shareholders of the New England bank voted 99 per cent in favour of buying Hudson. In a simultaneous meeting in Malwah, N.J., today, Hudson shareholders also voted in favour of the deal.

The deal combines Banknorth’s branches across New England with Hudson’s 204 branches, mostly in New Jersey and New York state where Banknorth has had little presence until now.

“It's a transaction that fits right in with what we have done in the past,” Bill Ryan, chief executive of TD Banknorth told a shareholders meeting here today.

Once the deal closes at the end of the month, the combined bank will have 590 branches and $26 billion in deposits across nine states from Maine to Pennsylvania.

Toronto Dominion bought a 51 per cent stake in Banknorth in 2004 for $3.8 billion, saying it planned to use its large cash reserves to fund growth through acquisition at Banknorth, already an aggressive acquisitor in the U.S. northeast.

With bank mergers a virtual impossibility at home, Canadian banks have looked abroad for investments.

Bank of Montreal has invested in the U.S. midwest, Royal Bank in the southeast and TD in the northeast. Bank of Nova Scotia has preferred to invest in developing countries, with a particular interest lately in Mexico.

TD has said it hopes to make Banknorth into a dominant force in New England.

When the latest deal was announced last July, Hudson was under a cloud over shortcomings in its compliance with Bank Secrecy Act and anti-money-laundering rules. Those worries were settled with regulators in the fall.