agreed to buy
Hudson United Bancorp
for $1.9 billion in cash and stock, expanding its operations in Connecticut and eastern New York and providing the company with a presence in New Jersey and Philadelphia.
The merged company would have 590 branches, 751 ATMs and more than $26 billion in deposits in eight northeastern states. Based on the closing price of TD Banknorth common stock on July 11, the deal values Hudson at $42.78 a share.
TD Banknorth said the cash for the transaction will be financed through the sale of about 29.6 million shares to its majority stockholder,
TD Bank Financial Group
, at a price of $31.79 a share. TD Banknorth expects the purchase to add 6 cents to its earnings per share in 2007, the first full year of combined operations. In 2006, the deal will likely cut its earnings by about 1 cent a share.
Also, two Hudson United directors will be added to the TD Banknorth board. The transaction requires approval by shareholders of Hudson United and TD Banknorth, as well as regulatory clearance, and should close in the first quarter of 2006.
TD Banknorth, a banking and financial services company based in Portland, Maine, had $32.1 billion worth of total consolidated assets on March 31.
Hudson United, with headquarters in Mahwah, N.J., is the holding company for Hudson United Bank, which has 204 offices in New Jersey, New York, Connecticut and Pennsylvania. Shares of Hudson were up $4.06, or 11%, to $41.56. TD Banknorth shares were losing 56 cents, or 2%, to $29.40.