Skipton Building Society
has agreed to sell its share-dealing operation,
( TWE) for
82 million ($130 million).
Bharat Masrani, TD Waterhouse executive vice president, told
that he believes the level of dealing online would increase significantly, despite the recent market volatility.
"It is a cyclical market with shares hitting highs and lows, but we feel extremely confident that online trading is here to stay," he said.
Masrani said TD Waterhouse wanted to increase its critical mass in the U.K., and this deal will make it the largest U.K. discount broker, ahead of
( SCH) and
Barclays Global Investors
"It also increases our position on the global stage, placing us second in terms of global business behind Charles Schwab," he said.
Masrani added that the investment would be made quickly to ensure that Dealwise customers would benefit from TD Waterhouse's multichannel service, which includes access via the Web, mobile phone and interactive TV.
TD Waterhouse will keep the Dealwise call center in Leeds, in addition to its own existing operations in Bradford and Manchester.
Given that Skipton bought the company in 1996 for only
3.6 million, it represents a very good deal for the mutual building society, which has been in the news lately in its battle to remain a mutually owned organization.
A cool profit of
78.4 million over just a three-year period represents very good business for Skipton, and this money may well be used to boost bonus payouts to its members and thereby strengthen the support to retain its mutual status.
TD Waterhouse denies that it has overpaid for Dealwise and sees it as good value, as well as crucial in terms of market penetration.
The company points to the fact that its share-dealing business figures more than doubled in the last quarter of 1999 and they are now expanding in what is still a developing market.