TSFG stockholders to get 28 cents a share
After more than two years of hemorrhaging red ink, The South Financial Group announced Monday that it would be acquired by TD Bank Financial Group for a paltry 28 cents a share.
Under the agreement, TD, parent of the Toronto-Dominion Bank, will acquire all outstanding shares of common stock of TSFG, for about $61 million in cash or stock, less than half of the Greenville-based bank’s current market value.
The deal represents a 60 percent discount to South Financial’s Friday closing of 67 cents. As of May 14, the bank’s market capitalization was $144.5 million, according to Reuters data.
TD said it would pay another $130.6 million in cash to the United States Treasury to buy $347 million of South Financial preferred stock.
TSFG has lost nearly $1.4 billion over the past two-plus years, including $85.8 million during the first three months of 2010.
Upon completion of the transaction, Ontario-based TD will acquire all of TSFG and all of its businesses and obligations, including all deposits of Carolina First Bank (which also operates as Mercantile Bank in Florida), according to information released Monday morning.
“Our board and management have conducted a broad and extensive process over the last six months to seek the best outcome for our shareholders, as well as for our customers, employees and the communities which we serve,” said Lynn Harton, President and CEO of South Financial.
The addition of TSFG marks TD Bank’s entry into the Carolinas and bolsters its Florida franchise. The franchises fit together very well, further filling out TD’s U.S. footprint.