First Horizon tanks as TD Bank deal scrapped

First Horizon shares tumbled in pre-market trade on Thursday after it and Canada’s TD Bank mutually agreed to terminate their planned $13bn merger due to a lack of clarity on regulatory approval.

"TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon," the companies said in a statement. "Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement."

As part of the termination agreement, TD will pay $200m in cash to First Horizon. This is in addition to the $2m fee reimbursement due to First Horizon pursuant to the merger agreement.

First Horizon chairman, president and chief executive officer Bryan Jordan, said: "While today's announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability."

TD Bank president and CEO Bharat Masrani said: "This decision provides our colleagues and shareholders with clarity. Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint."

At 1230 BST, First Horizon shares were down 46% in pre-market trade at $8.16.