Discount broker Ameritrade has rejected a hostile bid approach from online financial rival E*Trade and stated that the company is not for sale.
According to unconfirmed press reports, New York-based E*Trade made an unsolicited bid of over $5.5 billion for the discount broker last week.
In a statement issued today, Ameritrade's founder and chairman Joe Ricketts says the company's board of directors met yesterday and confirmed its support of the firm's growth strategy.
"Ameritrade is not for sale. We are confident in our management team and its strategy," says Ricketts.
Ameritrade, which has made seven M&A transactions in the past four years, says it expects further consolidation of the industry and it will continue to explore strategic opportunities. The firm had been rumoured to be holding secret talks to buy the TD Waterhouse unit from Canada's Toronto Dominion Bank.
Update
E*Trade has responded to Ameritrade's announcement by publicly confirming and detailing its takeover offer. The company says it offered Ameritrade shareholders 47.5% of a combined entity, plus $1.5bn in cash. Based on recent shares prices for the two companies, the bid would value Ameritrade at around $5.6bn. E*Trade says the merged businesses would also produce $650m in cost savings.
Ameritrade shares rose five cents on confirmation of the bid to close at $13.80, while E*trade stock finished 34 cents higher at $12.04.