Dime Bancorp and Hudson United Bancorp said after Friday's market close that they would terminate their pending $1.3 billion merger agreement.
Dime, which faces a $2.3 billion hostile bid by Melville, N.Y.-based North Fork Bancorp., said it would consider its strategic options. Dime, a $24.2 billion asset thrift company based in New York, said the North Fork bid is "inadequate" and "fraught with risk."
Chairman and chief executive officer Lawrence J. Toal said Dime is seven times larger that North Fork's next largest acquisition. "North Fork is biting off more than it can chew," he said.
In the joint press release, Dime and Hudson, based in Mahwah, N.J., said they agreed to cancel stock options granted in connection with the merger.
They said Hudson United would be entitled to receive $50 million to $92 million if Dime is bought, merges with another company, or sells off a substantial amount of its assets before Oct. 28, 2001. Dime will pay Hudson $15 million if none of these events occur.
