CBA has bid A$6.57 per share, less any dividend paid by IWL for the period ended 30 June 2007, for the IWL business. IWL shareholders will be able to receive payment wholly in case or in CBA shares of equivalent value.

CBA says the IWL business will be folded into its CommSec brokerage operations. Stuart Grimshaw CBA group executive, premium business services, says the retail client base of IWL is a strong fit with the existing equities business of CommSec.

"IWL's excellent capability in wholesale broking delivers us access to a market segment where CommSec's presence is underweight and where we believe we can deliver even more compelling features and service to wholesale clients," he adds.

The deal follows ANZ's acquisition earlier this year of the 65.8% stake it did not already own in E*trade Australia. Moves by IWL to acquire a five per cent strategic stake in E*Trade had threatened to de-rail ANZ's deal, and at one the point the broker was thought to be considering a make a bid for E*trade itself. But IWL later disposed of its E*trade stake and ANZ completed its buy-out of the business in June.

IWL chairman Rob Bishop says the decision to accept and recommend the CBA deal followed "significant strategic deliberations" of the "limited, immediate opportunities to continue our own domestic consolidation strategy".

IWL is Australia's third largest Internet broker, behind CBA's CommSec business and ANZ's E-Trade unit. However a large chunk of IWL's business comes from providng wholesale broking services for CBA rivals Westpac and National Australia Bank (NAB).

According to press reports there has been speculation that the two banks could "review" their contracts with IWL if the broker is bought out by CBA. Grimshaw told reporters that CBA would seek discussions with both banks.