TD Bank Buys First Horizon

TD Bank Group (TSE: TD)(NYSE: TD) and First Horizon Corporation (NYSE: FHN) announced Monday that they have signed a definitive agreement for TD to acquire First Horizon in an all-cash transaction valued at $13.4 billion, or $25 per common share from First Horizon.

TD Expands Presence in Southeastern U.S.

First Horizon operates 412 branches and serves more than 1.1 million personal, business and commercial customers in 12 states.

With this transaction, TD is accelerating its U.S. growth strategy and building a top six U.S. bank with immediate presence and reach in high-growth markets adjacent to TD.

TD will retain customer-facing bankers, with no closure of First Horizon banking centers in connection with the transaction.

The combined companies will be led by Leo Salom, Group Head, U.S. Retail, TD Bank Group, and president and CEO, TD Bank.

Management Commentary

“First Horizon is a great bank and a terrific strategic fit for TD. It provides TD with immediate presence and scale in highly attractive adjacent markets in the U.S. with significant opportunity for future growth across the Southeast,” said Bharat Masrani, Group President and Chief Executive Officer, TD.

“Working with the First Horizon team, TD will build upon the success of its strong franchise and deliver the legendary customer experiences that differentiate us in every market across our footprint.”

Wall Street’s Take

On February 23, National Bank Financial analyst Gabriel Dechaine kept a Buy rating on TD and raised the price target to C$108 (from C$106). This implies 4.7% upside potential.

Overall, TD scores a Moderate Buy rating among Wall Street analysts based on five Buys, six Holds and one Sell. The average Toronto-Dominion Bank price target of C$110.21 implies 6.8% upside potential to current levels.

TipRanks’ Smart Score

TD scores a 5 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to be in line with the overall market.

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