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.