TD
BANK
FINANCIAL GROUP TO ACQUIRE VFC INC.
Acquisition
would
expand bank’s indirect auto lending
TORONTO,
February 16, 2006 - TD Bank Financial Group (TDBFG) and VFC Inc. (VFC)
today announced they have entered into an agreement under which TDBFG will
offer
to acquire VFC, a leading provider of automotive purchase financing and consumer
installment loans.
“This
acquisition
is a logical extension of our existing business as a leader in dealer-based
automobile financing and an opportunity for us to increase our range of product
offerings in response to what dealers and their customers have said they
want,”
said Tim Hockey, group head, personal banking, TDBFG and co-chair, TD Canada
Trust. “VFC and its outstanding management team have a demonstrated track record
as leaders in what we see as an underserved, growing market.”
“We
believe the
potential synergies of the two organizations, particularly with regard to
referrals and distribution, will assist our growth strategy,” said Charles
Stewart, president and chief executive officer of VFC. “Additionally, we believe
this agreement represents an attractive value proposition for our shareholders.
We are excited about the new opportunities this presents.”
VFC,
with offices
in Toronto, Montreal and Nanaimo, has more than 220 employees servicing a
portfolio of CDN$380 million in finance receivables, representing more than
25,000 customers through a network of 2,000 pre-qualified automobile dealers
across Canada.
It
is intended that VFC will continue to operate under its existing brand and
management structure. TDBFG expects the acquisition to be neutral to its
earnings in 2006 and modestly accretive in 2007.
TD
Canada Trust has one of the country’s largest automotive dealer financing
businesses which has been independently ranked as a leader in customer service.
Terms
of
the deal:
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TDBFG
will
offer, subject to all necessary approvals, to acquire all of the
fully-diluted common shares of VFC at CDN$19.50 per share in cash
or the
equivalent of CDN$19.45 of TDBFG common shares and CDN$0.05 in
cash for
each VFC common share. VFC shareholders will have the right to
elect to
receive cash, TD shares or a combination of cash and TD shares.
This price
represents a premium of 38 percent over VFC’s closing share price of CDN
$14.15 on February 15, 2006, for a total of CDN$326 million;
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The
board of
directors of VFC, based upon the recommendation of its special
committee
of independent directors, has unanimously approved the transaction
and
agreed to recommend that VFC shareholders tender their shares to
the TDBFG
offer. The VFC board unanimously determined that the transaction
is in the
best interests of VFC and VFC shareholders
generally;
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VFC’s
board
of directors has received an opinion from its independent financial
advisor, Sprott Securities Inc., that the consideration being offered
is
fair, from a financial point of view, to VFC shareholders;
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VFC’s
senior
management and certain other VFC shareholders, holding in aggregate
approximately 4.9 million VFC common shares (being more than 29
percent of
the fully-diluted VFC common shares) have entered into “lock-up”
agreements with TDBFG to tender all their shares to the TDBFG
offer;
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TDBFG
and VFC
anticipate that the takeover bid circular and the directors’ circular
recommending the offer, will be mailed to VFC shareholders by early
March
with the offer being open for 35 days following the date of mailing,
unless extended or withdrawn. The offer will be subject to customary
closing conditions including the tender of a minimum of two-thirds
of the
outstanding VFC shares on a fully-diluted basis and the receipt
of
necessary regulatory approvals, including the Office of the Superintendent
of Financial Institutions. The agreement also provides for payment
of a
termination fee by VFC to TDBFG of CDN$9.25 million under certain
circumstances.
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Conference
call/Audiocast:
TDBFG
and VFC will
host a conference call for shareholders and analysts at 1pm ET, February
16,
2006 to discuss the announcement. The call is expected to last 30 minutes
and
will include Tim Hockey, group head, personal banking, TDBFG and co-chair,
TD
Canada Trust, Colleen Johnston, executive vice president and chief financial
officer, TDBFG, Bharat Masrani, vice chair and chief risk officer, TDBFG,
Charles Stewart, chief executive officer, VFC and Erik de Witte, chief financial
officer, VFC. A live audiocast of the conference call will be available online
at TDBFG’s web site (www.td.com/investor/index.jsp). Participants may also
listen to the conference call by dialing 416-644-3434 or toll free in Canada
and
the U.S. at 1-866-250-4909. A replay of the conference call will be available
shortly after the call by dialing 416-640-1917 (passcode: 21177690#) or
toll-free 1-877-289-8525 (passcode: 21177690#).
About
VFC
With
its focus on
non-prime automotive purchase financing, VFC Inc. (TSX: VFC) is one of the
largest Canadian-owned indirect consumer finance companies in Canada. VFC's
loans originate through its network of more than 2,000 pre-qualified automobile
dealers connected by a Web-based technology that provides for efficient
financing decisions. Founded in 1994, VFC has proven itself as a reliable
source
of credit to customers and an invaluable business partner to automobile dealers
and retail vendors nationwide. Independent analysts value the Canadian non-prime
automotive finance market at approximately $4 billion per annum. VFC's shares
trade on the Toronto Stock Exchange under the symbol "VFC". For further
information, see the company's website at www.vfc.ca.
About
TD
Bank Financial Group
The
Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank
Financial Group. TD Bank Financial Group serves more than 14 million customers
in four key businesses operating in a number of locations in key financial
centres around the
globe: Canadian
Personal and Commercial Banking including TD Canada Trust; Wealth
Management
including TD Waterhouse and an investment in TD Ameritrade; Wholesale Banking,
including TD Securities; and U.S. Personal and Commercial
Banking
through TD
Banknorth. TD Bank Financial Group also ranks among the world's leading on-line
financial services firms, with more than 4.5 million online customers. TD
Bank
Financial Group had CDN$365 billion in assets, as of October 31, 2005. The
Toronto-Dominion Bank trades on the Toronto and New York Stock Exchanges
under
the symbol "TD".
Forward-Looking
Statement
This
news release
may contain forward-looking statements within the meaning of U.S. and Canadian
securities laws. Such statements include, but are not limited to, statements
relating to anticipated financial and operating results, TD Bank Financial
Group’s plans, objectives, expectations and intentions and other statements
including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,”
“intend,” “will,” “should,” “may,” and other similar expressions. Such
statements are based upon the current beliefs and expectations of TD Bank
Financial Group’s management and involve a number of significant risks and
uncertainties. Actual results may differ materially from the results anticipated
in these forward-looking statements. The following factors, among others,
could
cause or contribute to such material differences: change in general economic
conditions; the performance of financial markets and interest rates; that
VFC
Inc. is able to successfully execute its strategies, or achieve planned
synergies; that the parties are unable to accurately forecast the anticipated
financial results of VFC Inc. following the transaction; that VFC Inc. is
unable
to compete successfully in this competitive marketplace; that VFC Inc. is
unable
to retain employees that are key to the operations of the business; that
VFC
Inc. is unable to identify and realize future consolidation and growth
opportunities; the risk of new and changing regulation in the U.S. and Canada;
acts of terrorism; and war or political instability. Additional factors that
could cause TD Bank Financial Group’s results to differ materially from those
described in the forward-looking statements can be found in TD Bank Financial
Group’s 2005 Annual Report, which was filed with the Canadian securities
regulators on December 12, 2005 and is available at the SEDAR Internet site
(http://www.sedar.gov). These forward-looking statements speak only as of
the
date on which the statements were made. We undertake no obligation to update
or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
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For
more
information:
TDBFG:
Scott
Lamb,
investor relations, 416-982-5075
Jeff
Keay, media
relations, 416-982-7528
VFC:
Charles
Stewart,
CEO, 416-645-5007
Erik
de Witte, CFO,
416-645-5010