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