Toronto bank to buy Commerce Bancorp

TD Bank Financial Group of Toronto will acquire Commerce Bancorp Inc. for $8.5 billion in an effort to expand its presence in the United States. The deal to purchase the Cherry Hill, N.J.-based bank in a 75% stock and 25% cash transaction, will mean that TD will take a one-time pretax restructuring charge of about $490 million, according to a joint statement issued by TD and Commerce. Commerce shareholders will get 0.4142 of a TD common share and $10.50 in cash for each common share of Commerce Bancorp. The deal values Commerce bank at $42.37 per share, based on TD's closing price yesterday on the Toronto Stock Exchange. Commerce closed at $39.74 on the New York Stock Exchange yesterday. The addition of Commerce Bank would give TD Bank Financial Group more than 2,000 branches in North America and approximately $250 billion dollars in deposits. The deal, which is expected to close in March or April 2008, is subject to approval of Commerce shareholders and U.S. and Canadian regulators. Commerce intends to sell a portion of its fixed-rate investment securities portfolio and reinvest in short-term or floating-rate AAA-rates securities, resulting an after-tax charge of about $150 million in the third quarter, according to the statement.