E*Trade Surges on Latest Deal Talk

In an appearance Wednesday morning on Fox Business Network, Donald Layton, E*Trade's outgoing CEO and chairman, was quoted as saying consolidation is "part of the game in financial services," according to a Dow Jones report.

E*Trade's hefty base of trading accounts would give competitors like the aforementioned TD Ameritrade and Charles Schwab Corp.(SCHW) an industry-leading market share by a wide margin. The hang-up to any deal has been the cumbersome home equity loan portfolio, which stood at roughly $8.3 billion at the end of the third quarter.

Layton also reportedly told Fox Business Network the company had hired a headhunter to search for his replacement but he had no update on any progress being made. Layton's announcement that he would leave E*Trade when his contract expired in December was made early in September, but the company has been relatively silent about its search for his successor, fueling some of the speculation that it could be being positioned for a merger or acquisition.

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Written by Michael Baron in New York. Debra Borchardt contributed to this article.

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