NEW YORK, May 12 /PRNewswire-FirstCall/ -- E*TRADE FINANCIAL (NYSE: ET)
today confirmed its proposal to Ameritrade (Nasdaq: AMTD) for a strategic
combination of the two companies. The proposal outlined a specific deal
structure that would give Ameritrade shareholders 47.5% fully-diluted
ownership of the combined E*TRADE FINANCIAL/Ameritrade entity plus
approximately $1.5 billion in cash, with expected synergies of at least $650
million. Terms of E*TRADE FINANCIAL's proposal to Ameritrade also include
joint participation in senior management roles and representation on the Board
of the combined entity.
"The proposed deal represents immediate value creation for shareholders of
both Ameritrade and E*TRADE FINANCIAL," said Mitchell H. Caplan, Chief
Executive Officer, E*TRADE FINANCIAL. "Our proposal would generate tremendous
benefit from combined revenue and expense synergies. E*TRADE's business model
provides Ameritrade a differentiated opportunity to take advantage of
significant revenue creation by monetizing key aspects of the brokerage
business through our cash management structure and by integrating customer
order flow with our institutional business."
Under Caplan's leadership, the combined companies would establish an
industry-leading franchise with over 7 million customers generating
approximately 300,000 trades per day, with total client assets of $170
billion, total client borrowing relationships in excess of $19 billion and the
highest pre-tax margins in the industry. Customer benefits of an E*TRADE
FINANCIAL/Ameritrade combined entity include an enhanced value proposition
with greater access to a suite of online financial solutions, including
comprehensive investing, trading, cash management and lending, delivered
through select components of each company's industry-leading technologies.
E*TRADE FINANCIAL's management and Board believe the advantages of greater
scale in each company's core transaction businesses, the ability to further
leverage customer cash, order flow and borrowing relationships across an
integrated platform represent a significant and compelling growth opportunity.
"The investment community has clearly stated a need for consolidation in this
industry," added Caplan. "The market's initial reaction validates its
acceptance of the proposal we have put forth."
About E*TRADE FINANCIAL
The E*TRADE FINANCIAL family of companies provides financial services
including investing, trading, banking and lending for retail and institutional
customers. Securities products and services are offered by E*TRADE Securities
LLC (Member NASD/SIPC). Bank and lending products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.
E*TRADE FINANCIAL and the E*TRADE FINANCIAL logo are registered trademarks or
trademarks of E*TRADE FINANCIAL Corporation.
Important Notice
This document contains statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. For those statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The following important factors could affect
future results and could cause those results to differ materially from those
expressed in the forward-looking statements: whether a transaction with
Ameritrade will occur and the terms and conditions of any such transaction;
the extent and timing of our ability to realize synergies from the
transaction; the effect of the transaction on the number of trades we may
generate and our ability to maximize the value of client relationships, our
client assets and our ability to maximize the value of those assets, our
borrowing relationships and our margins; our ability to obtain required
financing for the transaction; and our ability to obtain required regulatory
and other approvals in connection with the transaction. In addition, future
results could also differ materially from those expressed in the forward
looking statements as a result of: changes in market activity; anticipated
increases in the rate of new customer acquisition; the conversion of new
visitors to the site to customers; the activity of customers and assets held
at the institution; seasonality; the development and enhancement of products
and services; competitive pressures (including price competition); system
failures; economic and political conditions; changes in consumer behavior; and
the introduction of competing products having technological and/or other
advantages. Additional factors that may affect the future results of E*TRADE
FINANCIAL and Ameritrade are set forth in their respective filings with the
Securities and Exchange Commission ("SEC").
Additional Information and Where to Find It
This material is not a substitute for the prospectus/proxy statement
E*TRADE FINANCIAL and Ameritrade would file with the SEC if a negotiated
agreement with Ameritrade is reached. Investors are urged to read any such
prospectus/proxy statement, when available, which would contain important
information, including detailed risk factors. The prospectus/proxy statement
would be, and other documents filed by E*TRADE and Ameritrade with the
Securities and Exchange Commission are, available free of charge at the SEC's
website (http://www.sec.gov) or by directing a request to E*TRADE, Attn: Investor
Relations or Ameritrade, Attn: Investor Relations.
Participants in the Solicitation
E*TRADE FINANCIAL and its directors, executive officers, and other
employees may be deemed to be participants in the solicitation of proxies from
E*TRADE FINANCIAL stockholders and Ameritrade stockholders with respect to the
proposed transaction. Information about E*TRADE's directors and executive
officers is available in E*TRADE's proxy statement for its 2005 annual meeting
of shareholders, dated April 22, 2005. Additional information about the
interests of potential participants will be included in any registration
statement, prospectus/proxy statement and other materials to be filed with the
SEC if a negotiated agreement with Ameritrade is reached. (C) 2005 E*TRADE
FINANCIAL Corporation.
E*TRADE FINANCIAL Media Contact
Pam Erickson
E*TRADE FINANCIAL Corporation
617-296-6080
pam.erickson@etrade.com
E*TRADE FINANCIAL Investor Relations Contact
Adam Townsend
E*TRADE FINANCIAL Corporation
703-236-8719
adam.townsend@etrade.com
SOURCE E*TRADE FINANCIAL Corporation
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Related links:
http://www.etrade.com
CONTACT:
Media: Pam Erickson, +1-617-296-6080 or
pam.erickson@etrade.com, or Investor Relations: Adam Townsend,
+1-703-236-8719 or adam.townsend@etrade.com, both of E*TRADE
FINANCIAL Corporation
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