CEO: Ameritrade would consider E-Trade

TD Ameritrade would consider acquiring E-Trade Financial Corp. if the conditions were right, CEO Fred Tomczyk said Wednesday at the Reuters Global Finance Summit in New York.

An acquisition of some kind would be the best use of Omaha-based TD Ameritrade’s more than $1 billion in cash, but it also would consider paying a dividend, Tomczyk said.

E-Trade spokeswoman Pam Erickson said the company doesn’t comment on market speculation or rumor.

TD Ameritrade spokeswoman Kim Hillyer said the two companies weren’t negotiating a deal and she cautioned against making too much of Tomczyk’s response.

“It’s all part of our merger and acquisition strategy and it is no different than what we have said the last several years,” she said. “Doing any deal would have to be right for our company. Is this a deal that fits our risk-reward profile?”

TD Ameritrade has acquired other companies in the past, and there has been speculation during the last two years that it was interested in rival online firm E-Trade.

However, E-Trade’s involvement in the subprime mortgage lending crisis complicated prospects of an acquisition. TD Ameritrade steered clear of those kinds of investments and has been leery about taking on any financial problems.

TD Ameritrade has a clean balance sheet and “we don’t want to buy a bunch of problems,” Tomczyk said.

In the last few months, however, New York-based E-Trade has taken steps to strengthen its balance sheet, and it has a strong trading platform.

Tomczyk said any deal to acquire E-Trade would have to be “on the right terms with the right structure.”

He also said it “probably makes sense” to pay a dividend.

“With the kind of cash we’re generating on a consistent basis, at some point a dividend, I think, is a prudent thing to do.”

Contact the writer:

444-1117, joe.ruff@owh.com

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