NDB Soars as Deutsche Bank Holds to 14.3% Stake Plans

Updated from 10:58 a.m. EDT

Deutsche Bank formalized a nearly two-month-old agreement Thursday with U.S.-based National Discount Brokers Group (NDB Quote), saying it will go through with plans to take a 14.3% stake even though the brokerage's stock has fallen far below the agreed-upon price.

The companies also restated plans to form jointly owned online broker businesses outside of the U.S.

The news caused shares of Jersey City, N.J.-based NDB to surge Thursday, rising 4 1/4, or 17%, to 28 3/4 in afternoon trading. NDB has fallen sharply from its late-March levels near 45, where it traded when the deal was originally announced. (NDB closed up 3 1/2, or 14%, at 28.)

As originally announced on March 28, the $135.9 million deal calls for Deutsche Bank to buy 3 million shares of NDB common stock at $45.31 a share, an 81% premium over its closing price Wednesday. The purchase will bring Deutsche Bank's total stake in NDB to 16%, with provisions for it to buy an additional 3.3% stake through open-market purchases.

By forming alliances, the companies expect to leverage NDB's technology and online investment expertise with Deutsche Bank's global equity research and underwriting capabilities.