Commerce Bancorp Gobbled Up By TD (CBH, TD)

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Commerce Bancorp (NYSE:CBH) is being acquired by TD Bank Financial Group (NYSE:TD) of Canada for roughly $42.00 per share.  The deal is 25% cash with $10.50 cash and 0.4142 shares of TD in a total of $8.5 Billion cash and stock merger valued at $42.00 per share before any dilution.

The addition of Commerce Bank would give TD Bank Financial Group more than 2,000 branches in North America and approximately one-quarter of a trillion dollars in deposits.  Following the completion of the transaction, TDBFG expects to take a one time restructuring charge of approximately US$490 million pre-tax. On a GAAP basis, the transaction is expected to be 28 cents dilutive in fiscal 2008 and 22 cents dilutive in 2009 to TD’s earnings, and 10 cents dilutive in 2008 and flat in 2009 on an adjusted basis. The deal is expected to close in March or April 2008.

While $42.00 may be a low premium to the $39.74 close, this does represent a 5% premium to the 52-week high.

Jon C. Ogg
October 2, 2007