E-Trade says it made unsuccessful offer for online rival
OMAHA -- Only a few hours after online brokerage Ameritrade Holding Corp. affirmed that it was not for sale, rival E-Trade Financial Corp. disclosed it had made an unsuccessful bid for it.
One analyst said a company as well-run and profitable as Omaha-based Ameritrade can afford to bide its time.
''Certainly this is Ameritrade trying to take control of the situation," said analyst Lauren Bender, of Celent, a Boston-based consulting and research firm to financial services companies.
Either Ameritrade wants to remain independent or it is holding out for a better deal, said Bender. ''They have a lot of options," she said. ''My guess is this came out of left field for them."
After several days of unconfirmed published reports that a bid had been made, E-Trade said it had offered stock and cash for Ameritrade.
It was not immediately clear how much E-Trade's offer was worth. But it came as online brokers are under pressure to cut costs amid falling trading volumes and intense price competition.
Ameritrade's shares, which were down 5 percent earlier in the day, rose 4 cents to close at $13.80 on the Nasdaq Stock Market. That gives it a market value of more than $5.5 billion. Its shares have traded in a range of $9.35 to $14.61 over the past 52 weeks.
Shares of New York-based E-Trade fell 34 cents to close at $12.04 on the New York Stock Exchange.
David Trone of analyst firm Fox-Pitt, Kelton said Ameritrade and E-Trade are similar-sized companies, and neither wants to give up control.
''I see deals happening only when it's a big company buying a small company," Trone said.
Nor could E-Trade make an all-cash offer for Ameritrade. That kind of deal might have drawn more serious attention from Ameritrade's board, Trone said.
E-Trade said its proposal would give Ameritrade shareholders a 47.5 percent stake in the combined company plus about $1.5 billion in cash. It would also call for joint participation in senior management roles and representation on the board of the merged company.
