NEW YORK (TheStreet) -- M&T Bank (MTB) is working through a regulatory mess as part of its efforts to complete its acquisition of Hudson City Bancorp (HCBK), but the deal just keeps getting sweeter for M&T, according to Citigroup analyst Keith Horowitz.
M&T of Buffalo, N.Y. on Aug. 27, 2012 announced an agreement to acquire Hudson City Bancorp of Paramus, N.J. in a deal that was valued at roughly $3.7 billion in stock and cash when it was announced. M&T agreed to pay the equivalent of 0.08403 per M&T share for each share of Hudson City, with the mix of stock and cash set at 60% to 40%. M&T's stock closed at $85.87 on Aug. 12, 2012, while Hudson City's stock closed at $6.44 that day. M&T's offer when it was announced was worth $7.22 per Hudson City share, for a premium of 12%.
The merger was originally expected to be completed during the second quarter of 2013, but the two companies last April announced that the time needed to gain regulatory approval of the deal would be "extended substantially," because M&T had "learned that the Federal Reserve [had] identified certain regulatory concerns" with M&T's compliance programs. The companies now expect the merger to be completed by the end of 2014.
M&T's shares closed at $111.51 Friday, while Hudson City's shares closed at $9.04. So the deal is now worth $9.37 per Hudson City share, for premium of 4%, showing that Hudson City's shares haven't quite adjusted up to the deal value.