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TD Ameritrade plays down idea of E*Trade bid
TORONTO (Reuters) - TD Ameritrade Holding Corp can't see obvious merit in buying smaller rival E*Trade Financial, given the current "optimistic" price and doubts about E*Trade assets, the head of the U.S. online discount brokerage said on Wednesday.
Both TD Ameritrade and Charles Schwab Corp have been tipped as possible buyers for E*Trade, which agreed in July to review its options, perhaps including putting itself up for sale, at the insistence of its biggest investor, hedge fund Citadel LLC. [ID:nN1E76J0E7]
"We would do any transaction that made strategic and financial sense to us, but we still have not seen that to be obvious given the issues, particularly with respect to their assets," TD Ameritrade CEO Fred Tomczyk said at the Scotia Capital Financials Summit in Toronto.
Tomczyk said E*Trade stock tends to trade as a takeover target, making it pricier.
"We really are not interested in the assets. We would either sell them outright, or TD would take them," he said, referring to TD Ameritrade's largest shareholder, Canada's Toronto-Dominion Bank.
"And I would see TD only paying a reasonable price, not an optimistic price, because there are some significant issues in that asset pool."
E*Trade's attractions include 2.8 million brokerage accounts and a healthy deposit-gathering business. But it has also long been plagued by sup-par mortgages in its banking unit.
(Reporting by John McCrank; editing by Janet Guttsman)
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