18 February 2009

TD Bank Increases Stakes in TD Ameritrade & Internaxx

Asociated Press, 18 February 2009

The family of TD Ameritrade founder Joe Ricketts will sell 34 million of its shares in the online brokerage back to the company in a deal valued at almost $403-million (U.S.) to help finance the family's bid to buy the Chicago Cubs.

Ameritrade announced the stock purchase agreement Wednesday morning before its annual shareholder meeting.

Ameritrade agreed to pay the Ricketts family $11.85 per share. After the transaction, the Ricketts family stake in the company will shrink from about 22 per cent of Ameritrade's stock to about 17.7 per cent.

The Ricketts family will control two seats on Ameritrade's board instead of three after the deal.

Ameritrade said the purchase of the Ricketts' shares will complete its existing planned buyback programs, including the 28 million shares it planned to repurchase as part of its pending acquisition of thinkorswim Group Inc. Ameritrade's shares fell 16 cents to $12.40 in morning trading Wednesday after the announcement.

Last month, the Cubs' owners at Tribune Co. chose to enter exclusive negotiations with the Ricketts family.

“Our family is working to close a deal for the Chicago Cubs, and we are pleased to have reached a mutually beneficial agreement with the company that will help us to do so,” Joe Ricketts said in a statement.

The Ricketts family said last month that its winning bid for the Cubs was worth about $900-million, and it would include Wrigley Field and a 25 per cent interest in a regional sports network. But the family still must reach a final agreement with Tribune, which filed for bankruptcy protection in December.

In addition, a sale must be approved by Major League Baseball team owners.

One of Joe Ricketts' sons, Tom, has represented the family in its bid to buy the Cubs. Tom Ricketts is an Ameritrade board member, and he leads Chicago-based investment bank InCapital LLC.

Ameritrade shareholders will gather in Omaha Wednesday morning to hear the online brokerage's new CEO give an update.

Chief Executive Fred Tomczyk has been leading the Omaha-based company since October. Wednesday's annual meeting will be the first at which he'll preside.

Ameritrade has avoided most of the problems that plagued other financial services companies, because it didn't invest in U.S. subprime mortgages.

But the recession prompted Ameritrade to announce plans in January to cut $60-million in expenses. The brokerage predicted that its 2009 earnings will end up between 90 cents and $1.15 per share.

Ameritrade said Tuesday that it handled an average of 306,000 trades per day during January. That was 8 per cent from the 346,000 trades a day Ameritrade handled last January, but it was up 1 per cent from December.

Last month, Ameritrade announced plans to buy options trading specialist thinkorswim Group Inc. in a cash and stock deal worth roughly $606-million. Ameritrade officials said the thinkorswim deal, which is expected to close within six months, will strengthen the brokerage's trading business and add better tools for advanced options trades.

The shareholders meeting features only routine votes on electing five directors and choosing an auditor.
Bloomberg, Sean B. Pasternak, 17 Feburary 2009

Toronto-Dominion Bank, Canada’s second-largest bank by assets, agreed to increase its stake in Internaxx Bank to 75 percent to expand its online brokerage business in Europe.

Toronto-Dominion previously owned 25 percent of Luxembourg- based Internaxx, the Toronto-based bank said today in a statement. BGL, a lender in Luxembourg, will keep a minority stake. The price wasn’t disclosed.