Shareholders of KeyCorp in Cleveland and First Niagara Financial Group in Buffalo, N.Y., have approved Key's deal to acquire First Niagara.
Based on preliminary results, more than 90% of the votes cast by KeyCorp's shareholders supported the $4.1 billion deal, Chairman and Chief Executive Beth Mooney said during a special meeting Wednesday. Investors in First Niagara, which hosted a separate meeting Wednesday, also backed the deal, with more than 90% of the votes cast in favor, KeyCorp said in a press release.
KeyCorp announced the deal for the $39.9 billion-asset First Niagara in October. The deal met resistance from some KeyCorp investors who were spooked by its terms, including 12% tangible-book-value dilution that could take years to recoup. During the special meeting, a representative for a longtime KeyCorp shareholder questioned whether the deal was financially sound given that both companies' stocks have fallen since the announcement.
Mooney attributed the decline in her company's share price to "extreme volatility in the stock market," and said the $93 billion-asset company had performed in line with other banks.
Sen. Charles Schumer, D-N.Y., and some consumer groups have also opposed the deal. KeyCorp announced Friday that starting next year it would direct $16.5 billion in lending toward low- and moderate-income communities over five years.