E-Trade Financial Corp. (NYSE:ET) had made an unsolicited bid for AmeriTrade Holding Corp. (NASDAQ: AMTD), which in turn was in talks about making an offer for Canadian-owned TD Waterhouse Group Inc., the Wall Street Journal and the New York Times reported Monday.
The newspapers said E-Trade last week wrote to AmeriTrade with an indicative price per share it would be prepared to pay. Both reports cited unnamed sources.
The Times said E-Trade was prepared to pay more than $.5.5 billion for AmeriTrade, whose shares temporarily jumped 21 per cent on the news on Monday.
The two brokers' market values were almost equal at about $4.4 billion US and $4.55 billion US, respectively, on Friday. On Monday, after news of the approach broke, E-Trade was worth $4.7 billion, while AmeriTrade's value had risen to $5.4 billion.
TD Waterhouse is owned by TD Bank (TSX:TD), which has said in the past that it was looking for a partner for its online brokerage business. TD Waterhouse held talks last year with both E-Trade and AmeriTrade, but these foundered when TD Bank insisted on retaining operating control of the merged units.
None of the three brokerages, the three largest in the market after Charles Schwab, commented on the reports.
Analysts say the sector is ripe for consolidation, having slumped after the 1990s stock market bubble finally burst in March 2000. The equity markets slump brought on fierce competition on price and incentives hitting the brokerages' profits. In many cases, trading commissions have fallen below $10 US.
E-Trade has about three million customers, while AmeriTrade has close to 3.7 million customers.
AmeriTrade shares rose $2.11 US, or almost 19 per cent, to $13.42 US on the Nasdaq. E-Trade added 69 cents US to $12.62 US on the New York Stock Exchange, while TD Bank shares gained 50 cents to $51.14 on the Toronto Stock Exchange.
Share Tools
Top News Headlines
- Obesity now recognized as a disease
- The American Medical Association has voted to recognize obesity as a disease, while doctors in Canada say they also treat it as such. more »
- B.C. First Nation sets fires to save bison
- A First Nation band is reviving the age-old practice of controlled burning in order to improve the health of forests and restore the population of the wood bison in a corner of northeastern B.C. more »
- 1 in 8 bird species threatened with extinction
- One in eight bird species worldwide faces the threat of extinction, according to a report released by Birdlife International. more »
- Canada buys rare War of 1812 collection for $573K
- The government of Canada was the winning bidder for a large collection of letters, maps and other papers that once belonged to Sir John Sherbrooke, the lieutenant-governor of Nova Scotia who conquered Maine for the British during the War of 1812. The collection sold for $573,000 at auction in London. more »
Must Watch
Latest Business Headlines
- Orascom withdraws bid for control of Wind Mobile
- Orascom Telecom Holding has announced it is pulling back its bid to buy out Wind Mobile Canada founder and CEO Anthony Lacavera and acquire full control of the company, in which it already holds a 65 per cent interest. more »
- Poloz urges 'stability and patience' in 1st public speech
- In his first public remarks since being named governor of the Bank of Canada, Stephen Poloz said the central bank will keep its focus trained squarely on keeping inflation in check. more »
- World's wealthy richer than ever
- The investable wealth of the world's richest people reached a record high of $46.2 trillion US in 2012, a report by RBC Wealth Management and the consulting firm Capgemini has found. more »
- Talking Keystone, Redford says Canada and U.S. share energy values
- Alberta Premier Alison Redford says the United States and Canada share political and environmental values and must work together to become energy independent of those who do not. more »
Lang & O'Leary Exchange
Markets
| Index | Last Trade | Change |
|---|---|---|
| TSX COMPOSITE | 12268.29 | -99.17 |
| DOW | 15112.19 | -206.04 |
| NASDAQ | 3443.20 | -38.98 |
| SP 500 | 1628.93 | -22.88 |
| TSX-VENTURE | 924.25 | -5.74 |
The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.
- Sopranos star James Gandolfini dies in Italy
- Wearing a mask at a riot is now a crime
- Dozens of children seized from Manitoba Mennonite community
- B.C. teacher duct-taped students' mouths
- B.C. First Nation sets fires to save bison
- Richmond widow racks up $1,800 hospital parking bill
- Obesity now recognized as a disease
- Bob Rae quits as MP in 'very emotional' decision
- Hail, flash floods hit southeast Alberta
