Customers of TCF Bank have seen little change since Minnesota's third-largest bank finished merging with Michigan-based Chemical Financial Corp. last week.
But there's been confusion for stock watchers.
On some websites, TCF's stock price appeared to have nearly doubled from around $20 to about $40 a share on Thursday, the day the deal closed. On others, TCF's old stock prices, which hovered in the $20 range, disappeared completely and were replaced with the stock history of Chemical Financial.
"I know that the company has gone though a merger. Did it cause the price of the stock to double?" one shareholder wrote to the Star Tribune over the weekend.
Here's what happened:
While it was called a merger, the deal was actually a simple acquisition in which Detroit-based Chemical Financial bought out TCF's shareholders with stock. But in an unusual step for an acquiring firm, Chemical Financial decided to rename itself with the name of the firm it was buying.
In taking on the TCF name, it also adopted TCF's stock symbol, sometimes called a ticker symbol. That confused some personal finance websites, such as Yahoo Finance, which depicts TCF's shares as having nearly doubled last Thursday.
The structure of the deal was a stock-for-stock exchange based on a fixed ratio. If a TCF owner had 1,000 shares, they were converted to 508.1 shares of Chemical Financial just after midnight last Thursday. But with the conversion, Chemical Financial's shares took the TCF name.
A TCF shareholder who had paid little attention to the details of the deal may have been surprised on Thursday to wake up with half as many shares as he or she owned on Wednesday. On the other hand, he or she might have been surprised to see the price at around $42 from $21.38 the day before.
Both things happened, with the result that the overall value of that shareholder's stake was the same as the day before.
In an e-mail on Monday afternoon, TCF's investor relations chief Timothy Sedabres wrote, "Since Chemical stock was nearly twice the price per share as TCF, TCF holders received half as many shares in the new TCF, although the market value per share was higher."
By the end of trading Monday, of course, TCF's value was significantly lower. The company's shares tumbled with nearly all other U.S. stocks in the biggest market selloff of the year.
TCF shares finished the day down 3.5% to $38.75, slightly more than the 3.4% drop of the Nasdaq Stock Market where the company is listed.
Evan Ramstad • 612-673-4241
