Going-Private
Transaction
TORONTO,
ON and PORTLAND, ME, (November 20, 2006) - TD
Bank Financial Group (TDBFG) (TSX and NYSE: TD) and TD Banknorth Inc. (NYSE:
BNK) today announced that they have entered into a definitive merger agreement
providing for the acquisition by TDBFG of all of the outstanding shares of
common stock of TD Banknorth not currently owned by TDBFG for US$32.33 per
share
in cash.
The
Designated Independent Directors Committee, comprised of four directors of
TD
Banknorth not associated with TD Bank Financial Group, issued an invitation
to
TDBFG to submit a proposal in accordance with the TD Banknorth stockholders
agreement and negotiated the price and other terms of this transaction with
the
assistance of its financial and legal advisors.
The
Board of Directors of TD Banknorth, upon the unanimous recommendation and
approval of the Designated Independent Directors Committee, has unanimously
approved the merger agreement.
The
US$32.33 per share price represents a multiple of 22 times TD Banknorth’s GAAP
earnings for the twelve months ended September 30, 2006 and 14.4 times TD
Banknorth’s cash operating earnings for the twelve months ended September 30,
2006. The per share price is a 6.5% premium over the TD Banknorth closing
price
on Friday, November 17, 2006. The aggregate consideration payable under the
proposal is expected to be approximately US$3.2 billion (CDN$3.6 billion).
TD
Bank Financial Group currently owns approximately 130 million shares of common
stock of TD Banknorth, representing approximately 57% of the outstanding
shares
of common stock. Upon completion of the transaction, TD Banknorth would become
a
wholly owned subsidiary of TD Bank Financial Group.
“This
transaction offers TD Banknorth shareholders an opportunity to realize fair
value for their shares, while also offering TD Bank Financial Group shareholders
the long term benefits of 100% ownership of a US banking business in an
attractive marketplace,” said Ed Clark, President and Chief Executive Officer,
TD Bank Financial Group. “TD Banknorth’s strength has always been as a
customer-focused bank and we don’t see that changing in light of today’s
announcement. We remain committed to the future of TD Banknorth.”
TD
Bank Financial Group also announced that it has entered into a voting agreement
with a large stockholder of TD Banknorth, pursuant to which the stockholder
has
agreed to vote all shares of common stock of TD Banknorth over which it
exercises voting authority in favor of the transaction.
In
addition, another large stockholder has reviewed the general terms of this
proposed transaction and has advised TDBFG that its current expectation is
to
vote in favor of the transaction. Together these two stockholders currently
hold
or have investment discretion over 26.2 million shares. Although these
shareholders do not have voting authority over all of these shares, TDBFG
expects the majority of these shares will be voted in favor of this
transaction.
“On
behalf of our shareholders, I am pleased that we have been able to reach
an
agreement for TD to acquire the balance of TD Banknorth’s outstanding shares,”
said Bill Ryan, Chairman and Chief Executive Officer, TD Banknorth. “The
transaction rewards our shareholders with a fair price and reaffirms TD’s
long-term commitment to the U.S. banking industry.”
The
proposed transaction requires the affirmative vote of a majority of the
outstanding shares of common stock of TD Banknorth and a majority of the
outstanding shares of common stock of TD Banknorth not held by TDBFG or its
affiliates. TD Banknorth will schedule a special meeting of its stockholders
for
the purpose of obtaining stockholder approval of the transaction. The
transaction is also subject to the approval of the Massachusetts Board of
Bank
Incorporation. The transaction is expected to close in March or April 2007.
Based
on I/B/E/S estimates, TDBFG expects earnings per share accretion on a GAAP
basis
would be CDN$0.02 per share for six months in 2007 and CDN$0.12 per share
in
2008. Projected accretion on an adjusted basis, or before the amortization
of
intangibles, is projected to be CDN$0.05 per share for six months in 2007
and
CDN$0.16 per share in 2008.
Two
conference calls for analysts are scheduled for today, November 20, 2006.
The TD
Banknorth call will start at 9:30 am ET, followed immediately by the TDBFG
call.
The phone number for both calls is 1-800-733-7571. Media and shareholders
may
view the slide presentations and listen in on the calls via webcast at
www.tdbanknorth.com/investorrelations and www.td.com/investor.
TD
Securities and Goldman, Sachs & Co. are serving as financial advisors and
Simpson Thacher & Bartlett LLP is serving as legal advisor to TD. Sandler
O’Neill & Partners, L.P. is serving as financial advisor and Wachtell,
Lipton, Rosen & Katz is serving as legal advisor to the Designated
Independent Directors Committee of the TD Banknorth Board of
Directors.
This
news release contains “forward-looking statements.” Such statements include, but
are not limited to, statements relating to anticipated financial and operating
results, the companies’ plans, objectives, expectations and intentions and other
statements including words such as “anticipate,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such
statements are based upon the current beliefs and expectations of TD Bank
Financial Group’s and TD Banknorth’s management and involve a number of
significant risks and uncertainties. Actual results may differ materially
from
the results anticipated in these forward-looking statements. The following
factors, among others, could cause or contribute to such material
differences:
change in general economic conditions; the performance of financial markets
and
interest rates; the ability to obtain the approval of the transaction by
TD
Banknorth stockholders; the ability to obtain governmental approvals of the
transaction or to satisfy other conditions to the transaction on the proposed
terms and schedule; increased competition and its effect on pricing, spending,
third-party relationships and revenues; the risk of new and changing regulation
in the U.S. and Canada; acts of terrorism; and war or political instability.
Additional factors that could cause TD Bank Financial Group’s and TD Banknorth’s
results to differ materially from those described in the forward-looking
statements can be found in the 2005 Annual Report on Form 40-F for TD Bank
Financial Group and the 2005 Annual Report on Form 10-K of TD Banknorth filed
with the Securities and Exchange Commission and available at the Securities
and
Exchange Commission’s Internet site (http://www.sec.gov).
In
connection with the proposed merger, TD Banknorth will file a proxy statement
with the Securities and Exchange Commission. Stockholders
of TD Banknorth are urged to read the proxy statement regarding the proposed
merger when it becomes available, because it will contain important
information.
Stockholders will be able to obtain a free copy of the proxy statement as
well
as other filings containing information about TD Bank Financial Group and
TD
Banknorth, when available, without charge, at the Securities and Exchange
Commission’s Internet site (http://www.sec.gov). In addition, copies of the
proxy statement can be obtained, when available, without charge, by directing
a
request to TD Bank Financial Group, 66 Wellington Street West, Toronto, ON
M5K
1A2, Attention: Investor Relations, (416) 308-9030, or to TD Banknorth
Inc., Two Portland Square, P.O. Box 9540, Portland, ME 04112-9540, Attention:
Investor Relations, (207) 761-8517.
TD
Bank Financial Group, TD Banknorth, their respective directors and executive
officers and other persons may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information regarding
TD Bank
Financial Group’s directors and executive officers is available in its Annual
Report on Form 40-F for the year ended October 31, 2005, which was filed
with
the Securities and Exchange Commission on December 12, 2005, and its notice
of
annual meeting and proxy circular for its most recent annual meeting, which
was
filed with the Securities and Exchange Commission on February 24, 2006.
Information regarding TD Banknorth’s directors and executive officers is
available in TD Banknorth’s proxy statement for its most recent annual meeting,
which was filed with the Securities and Exchange Commission on March 30,
2006.
Other information regarding the participants in the proxy solicitation and
a
description of their direct and indirect interests, by security holdings
or
otherwise, will be contained in the proxy statement, the Schedule 13E-3
transaction statement and other relevant materials to be filed with the
Securities and Exchange Commission when they become available.
About
TD Bank Financial Group
The
Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank
Financial Group. TD Bank Financial Group serves more than 14 million customers
in four key businesses operating in a number of locations in key financial
centres around the globe: Canadian Personal and Commercial Banking including
TD
Canada Trust; Wealth Management including TD Waterhouse and an investment
in TD
Ameritrade; Wholesale Banking, including TD Securities; and U.S. Personal
and
Commercial Banking through TD Banknorth. TD Bank Financial Group also ranks
among the world's leading on-line financial services firms, with more than
4.5
million on-line customers. TD Bank Financial Group had CDN$385.8 billion
in
assets, as of July 31, 2006. The Toronto-Dominion Bank trades on the Toronto
and
New York Stock Exchanges under the symbol “TD”.
About
TD Banknorth Inc.
TD
Banknorth Inc. is a leading banking and financial services company headquartered
in Portland, Maine and a majority-owned subsidiary of TD Bank Financial Group.
At September 30, 2006, TD Banknorth had $40 billion of total consolidated
assets
and provided financial services to nearly 1.6 million households in the
Northeast. TD Banknorth's banking subsidiary, TD Banknorth, N.A., operates
banking divisions in Connecticut, Maine, Massachusetts, New Hampshire, New
Jersey, New York, Pennsylvania and Vermont. TD Banknorth and TD Banknorth,
N.A.
also operate subsidiaries and divisions in insurance, wealth management,
merchant services, mortgage banking, government banking, private label credit
cards, insurance premium financing and other financial services and offers
investment products in association with PrimeVest Financial Services, Inc.
The
TD Banknorth common stock trades on the New York Stock Exchange under the
symbol
“BNK”. For more information, visit http://www.TDBanknorth.com.
-30-
For
further information
|
Neil
Parmenter, TDBFG External Communications
|
416-982-4285
|
|
Tim
Thompson, TDBFG Investor Relations
|
416-982-6346
|
|
Jeff
Nathanson, TD Banknorth Investor Relations
|
207-761-8517
|