Toronto-Dominion Bank TD.TO, Ameritrade's largest investor, endorsed the transaction, which it said will not materially affect the Canadian bank's earnings or capital. The CEO said Ameritrade, which has grown aggressively through acquisitions, is not ruling out further acquisitions in the near term. Tomczyk said Ameritrade has been able to “get comfortable” with the ongoing SEC inquiry. Securities and Exchange Commission was conducting an inquiry over certain presentations made by the company. Thinkorswim changed its name from Investools last year, shortly after revealing the U.S. “The big draw for TD Ameritrade is that it really boosts their presence in options trading, which is fast-growing and more profitable than equities trading,” said Patrick O’Shaughnessy, analyst at Raymond James and Associates. It only slightly boosts Ameritrade’s total client assets by $3 billion to $281 billion - well below Schwab’s $1.11 trillion in November.
Schwab recorded an average of about 270,000 trades in the same period. The deal is expected to close within six months, pending thinkorswim shareholder approval.Īmeritrade said the transaction boosts its average client trades per day by 16 percent to about 350,000 trades, calculated from September 2007 through September 2008. Tomczyk said in the interview there would “inevitably” be job losses, but stressed they were a minor part of overall cost savings. The deal is expected to yield $55 million in revenues and cost savings, primarily from retiring thinkorswim’s clearing contract when it retires at the end of next year. This values thinkorswim at $8.71 per share, a 54 percent premium over Wednesday’s closing price of $5.65.Īmeritrade management said on a conference call it expects the deal to boost fiscal 2010 earnings by 3 percent to 7 percent, and by 10 percent to 15 percent after thinkorswim is fully integrated, in about two year. The proposed acquisition gives shareholders of thinkorswim 0.3980 of a Ameritrade share plus $3.34 in cash for each of their shares. “It was a very good time to pick up an attractive asset at an attractive price,” Ameritrade Chief Executive Fred Tomczyk told Reuters. The stock and cash takeover announced Thursday would bolster Ameritrade's industry-leading trading business, and allow it to challenge Charles Schwab Corp's SCHW.O standing at the top of the industry.Īmeritrade shares fell 2.7 percent on Thursday while thinkorswim shares, which plummeted 69 percent last year, recovered nearly two thirds of that lost value. online broker in the fast-growing area of options and futures trading. NEW YORK, Jan 8 (Reuters) - TD Ameritrade Holding Corp AMTD.O has agreed buy thinkorswim Group Inc SWIM.O in a $606 million deal that establishes the U.S.
(Recasts lead adds CEO interview, analyst updates shares)
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