Ameritrade and TD Waterhouse confirm merger talks

Ameritrade and TD Waterhouse confirm merger talks

Canada's Toronto Dominion Bank has confirmed it is in talks with Ameritrade regarding a "potential transaction" involving its online brokerage subsidiary TD Waterhouse USA.

Financial details of a potential merger were not disclosed, but the Financial Times is reporting that the deal could be worth between $2bn and $3bn.

Citing people familiar with the matter, the FT says the two firms moved within "striking distance" of a deal - which is structured as a takeover by Ameritrade of TD Waterhouse - over the long holiday weekend in the US.

The FT says Ameritrade and TD Waterhouse, a US-based unit of Canada's Toronto Dominion Bank, have been discussing a merger for several months but accelerated talks when Ameritrade was approached by rival online broker E*Trade with a $6.2bn unsolicited bid. In a statement Ameritrade said it was not for sale. The company, which has made seven M&A transactions in the past four years, said it would continue to explore strategic opportunities.

According to the FT report, a deal could be announced soon, although probably not before next week and talks could still fall through.

Ameritrade stock jumped 2.71%, or 39 cents to $14.75 on the news, while shares in TD Bank rose 2.78%, or $1.15 to $42.50 in trading on Nyse.

E*Trade abandoned sale talks with TD Waterhouse in January last year after the two companies failed to agree terms over control of the combined entity.

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