Hudson United Bancorp (NYSE:HU)
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TD Banknorth Inc. (NYSE: BNK) and Hudson United Bancorp
(NYSE: HU) announced today that they have signed a definitive
agreement for TD Banknorth to acquire Hudson United for approximately
$1.9 billion in cash and TD Banknorth stock.
"This acquisition is consistent with our growth strategy and will
significantly expand our franchise in both Connecticut and eastern New
York while providing us with a presence in the fast-growing markets of
New Jersey and Philadelphia," said William J. Ryan, TD Banknorth's
Chairman, President and Chief Executive Officer. "We look forward to
welcoming Hudson United into the TD Banknorth family and to offering
Hudson United's customers a broader array of products and services."
On a pro forma basis, the transaction will create a regional
financial services company with 590 branches, 751 ATMs and over $26
billion in deposits across 8 northeastern states.
Acquisition Details
Under the terms of the definitive agreement, Hudson United
shareholders will have the right, subject to proration, to elect to
receive cash and/or TD Banknorth common stock, in either case having a
value equal to $21.07 plus the product of 0.7247 times the average
closing price of the TD Banknorth common stock during a ten-trading
day period ending on the fifth trading day prior to the closing date.
Based on the closing price of the TD Banknorth common stock on July
11, 2005, the deal is valued at $42.78 per Hudson United share and the
aggregate merger consideration consists of approximately 51% TD
Banknorth common stock and 49% cash. It is anticipated that the common
stock consideration received in the transaction will be tax-free to
Hudson United shareholders.
The cash for the transaction will be financed through TD
Banknorth's sale of approximately 29.6 million shares of TD Banknorth
common stock to TD Banknorth's majority stockholder, TD Bank Financial
Group ("TD"), at a price of $31.79 per share. On a pro forma basis,
based on the number of TD Banknorth shares outstanding as of June 30,
2005, TD's percentage ownership of TD Banknorth will decrease slightly
after giving effect to the transaction. However, through TD Banknorth
share repurchases or, subject to meeting regulatory requirements, open
market purchases, TD has indicated its intent to at least maintain its
ownership of TD Banknorth at the level prior to the acquisition of
Hudson United or, as market conditions warrant, to potentially
increase its position.
It is anticipated that the transaction will be accretive to TD
Banknorth's GAAP EPS by approximately $0.06 in 2007, the first full
year of combined operations between the two companies. In 2006, it is
anticipated that the transaction will be slightly dilutive to TD
Banknorth's GAAP EPS by approximately $0.01.
"We are excited about joining TD Banknorth," said Kenneth Neilson,
Hudson United's Chairman, President and Chief Executive Officer. "This
transaction rewards our shareholders while maintaining our focus on
local community banking."
Under the terms of the definitive agreement, two Hudson United
directors will be added to the TD Banknorth Board of Directors.
"We are pleased to support Bill Ryan and his team in this
strategic acquisition," said Ed Clark, President and Chief Executive
Office of TD Bank Financial Group. "This transaction delivers on our
shared vision for growth and marks a significant milestone in TD
Banknorth's expansion strategy."
The transaction is subject to approval by shareholders of Hudson
United and TD Banknorth, as well as customary regulatory approvals,
and is expected to close in the first quarter of 2006.
Lehman Brothers served as TD Banknorth's financial advisor and
Elias, Matz, Tiernan & Herrick, LLP served as TD Banknorth's counsel.
Keefe, Bruyette and Woods served as Hudson United's financial advisor
and Pitney Hardin LLP served as Hudson United's counsel.
Conference Call Details
TD Banknorth will hold an analyst conference call today, July 12,
2005, at 10:00 a.m., Eastern Time, to discuss details of the
transaction. The call will feature a presentation by TD Banknorth's
CEO, Bill Ryan, and will be followed by a question and answer period
for analysts and investors. The dial-in number for the call in the USA
and Canada is 800-299-9630 and the international dial-in number is
617-786-2904. The passcode for the call is 38328527. The conference
call is also being webcast by CCBN and can be accessed at TD
Banknorth's website at www.tdbanknorth.com/investorrelations.
Immediately following the TD Banknorth call, TD will host a call
for its shareholders and analysts (using the same number and webcast
coordinates) at approximately 11:10 am Eastern Time. The call will
feature a presentation by Ed Clark and TD's Chief Financial Officer,
Dan Marinangeli, and will be followed by a question and answer period
for investors. The dial-in number for the call is the same as for the
TD Banknorth call: USA and Canada - 800-299-9630, International -
617-786-2904. The passcode for the call is 38328527. Participants of
the TD Banknorth call are welcome to remain on the line for the second
call. An audiocast of the call will be available on line at TD's
website at www.td.com/investor/index.jsp.
A replay of the conference call will be available shortly after
the call's completion for at least 30 days. The replay dial-in number
in the USA and Canada is 888-286-8010 and the international replay
dial-in number is 617 801-6888. The replay passcode is 19540613. A
webcast replay will also be available at TD Banknorth's website
www.tdbanknorth.com/investorrelations.
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 March 31, 2005, TD Banknorth
had $32.1 billion of total consolidated assets and provided financial
services to over 1.3 million households in the Northeast. TD
Banknorth's banking subsidiary, TD Banknorth, N.A., operates banking
divisions in Maine, New Hampshire, Massachusetts, Connecticut, Vermont
and upstate New York. TD Banknorth and TD Banknorth, N.A. also operate
subsidiaries and divisions in insurance, wealth management, merchant
services, mortgage banking, government banking and other financial
services and offer 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.
About Hudson United Bancorp
Hudson United Bancorp is the multi-state bank holding company for
Hudson United Bank, which has 204 offices in New Jersey, New York,
Connecticut and Pennsylvania. Hudson United Bancorp's subsidiaries
offer a full array of innovative products and services to commercial
and retail accounts, including imaged checking accounts, 24-hour
telephone and internet banking, loans by phone, alternative investment
products, insurance products, private label credit programs and a wide
variety of commercial loans and services including asset based loans,
SBA loans, international services, merchant services and cash
management services. Wealth management services are also provided to
individuals and businesses. Public sector products and services are
provided to local and state governments, municipalities, educational
institutions, civic and not-for-profit organizations. For more
information, visit http:www.hudsonunitedbank.com
Forward-looking Information
This press release contains forward-looking statements regarding
TD Banknorth's acquisition of Hudson United and the effect on TD's
percentage ownership of TD Banknorth. Words such as "expect", "feel",
"believe", "will", "may", "anticipate", "plan", "estimate", "intend",
"should" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements involve
certain risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated by such forward-looking
statements include, among others, the following possibilities: (1)
estimated cost savings from the acquisition cannot be fully realized
within the expected time frame; (2) revenues following the acquisition
are lower than expected; (3) competitive pressure among depository
institutions increases significantly; (4) costs or difficulties
related to the integration of the businesses of TD Banknorth and
Hudson United are greater than expected; (5) changes in the interest
rate environment reduce interest margins; (6) general economic
conditions, either nationally or in the markets in which TD Banknorth
will be doing business, are less favorable than expected; (7)
legislation or changes in regulatory requirements adversely affect the
businesses in which TD Banknorth would be engaged; or (8) factors
which would result in a condition to the transaction not being met.
Neither TD Banknorth nor Hudson United undertakes any obligation to
update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements were
made.
Additional Information About the Transaction
This press release may be deemed to be solicitation material in
respect of the proposed merger of TD Banknorth and Hudson United. In
connection with the proposed transaction, a registration statement on
Form S-4 will be filed with the SEC. Shareholders of TD Banknorth and
shareholders of Hudson United are encouraged to read the registration
statement and any other relevant documents filed with the SEC,
including the joint proxy statement/prospectus that will be part of
the registration statement, because they will contain important
information about the proposed merger. The final joint proxy
statement/prospectus will be mailed to shareholders of TD Banknorth
and shareholders of Hudson United. Investors and security holders will
be able to obtain the documents free of charge at the SEC's website,
www.sec.gov, from TD Banknorth, Two Portland Square, P.O. Box 9540,
Portland, Maine 04112-9540, Attention: Investor Relations, or from
Hudson United, 1000 MacArthur Boulevard, Mahwah, New Jersey 07430,
Attention: Investor Relations.
TD Banknorth, Hudson United and their respective directors and
executive officers and other members of management and employees may
be deemed to participate in the solicitation of proxies in respect of
the proposed transaction. Information regarding TD Banknorth's
directors and executive officers is available in TD Banknorth's proxy
statement for its 2005 annual meeting of shareholders, which was filed
with the SEC on April 20, 2005, and information regarding Hudson
United's directors and executive officers is available in Hudson
United's proxy statement for its 2005 annual meeting of shareholders,
which was filed with the SEC on March 23, 2005. Additional information
regarding the interests of such potential participants will be
included in the joint proxy statement/prospectus and the other
relevant documents filed with the SEC when they become available.