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Rating:TD Might Buy E*Trade, Under the 'Right Terms' Not Rated 1.0 Email Routing List Email & Route  Print Print
Thursday, November 19, 2009

TD Might Buy E*Trade, Under the 'Right Terms'

News summary by MFWire's editors

TD Ameritrade CEO Fred Tomczyk just gave the TD/E*Trade M&A rumors a shot in the arm. Reuters' Jonathan Spicer reports that, speaking Wednesday at the Reuters Global Finance Summit in New York, Tomczyk directly addressed whether or not his online brokerage firm might buy E*Trade.

"We'd be interested but it has to be on the right terms with the right structure. We have a very clean balance sheet, so we don't want to buy a bunch of problems," Tomczyk reportedly said, hinting at TD's recent quarterly profits and E*Trade's nine straight quarterly losses. "The best deployment of our cash would be in a transaction, but you have to see the opportunity to have a transaction that makes sense."

Then on the PBS Nightly Business Report, speaking to Susie Gharib, Tomczyk reiterated that he's open to "any transaction that makes strategic and financial sense." He confirmed that TD has the "appetite for another big acquisition," in Gharib's words.

"Our stock is doing well and has done well. We have a lot of cash on our balance sheet," Tomczyk said on the PBS show. "Our debt levels are very prudent so, we have the appetite, but it has to make strategic and financial sense."

The Associated Press, the Omaha World-Herald, the Toronto Globe and Mail and Traders Huddle all weighed in the wake of Tomczyk's remarks.

According to Reuters, TD boasts about $1.4 billion in corporate cash. E*Trade's current market cap is about $3.15 billion.

While both E*Trade and TD are both online discount brokerages, E*Trade had also been in the proprietary fund business, which it exited this year. The New York-based firm decided to pull the plug on its fund business, liquidating four index funds with $450 million in assets and one active fund with $40 million in March, and then liquidating its final fund, $35 million Delphi Value, in April. 

Edited by: Neil Anderson, Managing Editor

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