Wednesday, February 6, 2008

Bank merger and personal drama

Mr. Hill is still alive, but this is happening over his metaphorically "dead body."

Shareholders of Commerce Bancorp Inc. will meet later today to approve the sale of that New Jersey bank to a Canadian company, TD Bank Financial Group.

Regulatory approvals are still pending, but if everything goes as expected the result will be one of the largest banks on the North American continent.

The deal is based on a share swap as well as cash payments. Commerce shareholders will receive 0.4142 shares of a TD common share and $10.50 in cash in exchange for each common share of Commerce Bancorp Inc. That was calculated on the basis of a valuation of US$42 per share for Commerce.

The drama here is the fall of Commerce founder, Vernon W. Hill II, who staunchly opposed selling his bank. his baby. The board of directors had to squeeze him out in order to put it up for sale.

The office of the Comptroller of the Currency helped them do so. It made noises about investigating Hill, and stopped approving new bank branches until he retired.

Here's a link for those of you who may want to read some more about Hill and that particular squeeze.

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