The rumor on the Street is that E*Trade
is courting Ameritrade
and this time it appears the rumor has some merit. Word of the possible match circulated among stock traders late last week and was picked up by the Wall Street Journal
The paper reports that E*Trade Financial sent Ameritrade Holding a "bear-hug" letter last week as part of an effort to kick start merger talks. The letter was intended to formerly notify Ameritrade's board and CEO Joseph Moglia of E*Trades intent to purchase the firm.
The letter included a price that E*Trade would be willing to pay for the Omaha discount broker. The paper did not learn what that price was.
It guesses that a deal could reach $12 billion to $14 billion in value. E*Trade closed the week with a market cap of $4.4 billion compared to Ameritrade's $4.55 billion.
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