NEW YORK (Reuters) - M&T Bank Corp’s (MTB.N) proposed purchase of Hudson City Bancorp Inc HCBK.O will probably take more time to close than previously expected because of U.S. regulatory concerns over anti-money-laundering procedures, the banks said on Friday.
Buffalo, New York-based M&T has hired an outside consultant to help it address the concerns raised by regulators at the U.S. Federal Reserve, it said in a statement. It did not immediately identify the consultant.
Shares of M&T fell nearly 4 percent to $100.99 on Friday morning, while Paramus, New Jersey-based Hudson City’s stock dropped 5.2 percent to $8.31.
When the deal was announced in August, it was worth $7.22 for each Hudson City share, or a total of about $3.7 billion.
At the time, the banks said they expected the closing in the second quarter of 2013. Given the delay, they have extended the date after which either could abandon the proposed acquisition to January 31 from August 27.
M&T, which has Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) as a major shareholder, aims to expand its presence on the U.S. East Coast by buying Hudson City, which has branches in New Jersey and other parts of the New York City area.
The deal, which would create a combined network of about 870 branches, is expected to boost M&T’s earnings as soon as it closes.
The purchase price and exchange ratio announced in August will remain the same, the Friday statement said, and both companies will proceed with shareholder meetings scheduled for later this month to vote on the deal.
Hudson City shareholders are to receive M&T shares for 60 percent of the purchase, plus cash for other 40 percent. The total value per Hudson City share is fixed at 0.08403 M&T share.
The amount of cash will increase or decrease with the price of M&T stock until the deal’s closing.
Reporting by Frank McGurty; Editing by Gerald E. McCormick and Lisa Von Ahn