Ameritrade Reportedly Close to TD Waterhouse Buy

A deal could leave E*Trade in the lurch.
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Ameritrade

(AMTD) - Get Report

reportedly is near a deal to acquire fellow online brokerage TD Waterhouse USA, dealing a potential blow to

E*Trade's

(ET) - Get Report

acquisition strategy.

Reports say Ameritrade plans to take control of TD Waterhouse USA by issuing stock worth about $3 billion, or about one-third of the combined company. Existing Ameritrade holders would also get a $1 special dividend, according to the

Wall Street Journal

.

A completed deal would be a big step in the direction of a long-predicted consolidation among online stock brokers, where stiff competition and lukewarm volume have eaten into profit margins.

It would also complicate the efforts of E*Trade to acquire Ameritrade. The two companies confirmed a $5.5 billion bid last month, and a report on June 6 said the offer has since been increased to include a 49.5% equity stake for Ameritrade holders, up from a previous 47.5% stake.

An obstacle to an Ameritrade buyout has reportedly been opposition on the part of its biggest shareholder, the founding Rickets family, which controls 30% of the company.

In premarket trading, Ameritrade fell 20 cents to $14.81. E*Trade lost 33 cents to $12.80.