MAHWAH, N.J.. - Hudson United Bancorp said it expects to receive a $92 million breakup fee as a result of the planned merger between New York's Dime Bancorp Inc., and Washington Mutual Inc. of Seattle.
Hudson United, which canceled its own deal to merge with Dime in April 2000 after Dime received a hostile offer from North Fork Bancorp of Melville, N.Y., said it is entitled to the sum according to its merger agreement with Dime. Under the agreement, Hudson United was entitled to up to $92 million if Dime was sold within 18 months of the termination. On Monday, Dime announced it would sell itself for $5.2 billion in stock and cash to Washington Mutual.
Of the $92 million, $15 million is due to Hudson United today as the minimum amount that Dime was required to pay, the company said. The balance is to be paid when the deal closes, which is expected in the first quarter. Hudson United said it expects to incur $12 million of its own merger-related expenses, but would use the final payment from Dime to supplement capital ratios, and perhaps for repurchasing stock, retiring debt, or for other purposes.