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Upbeat E*TRADE Snaps Up Softbank's Shares

E*TRADE Group Inc. appears to see brighter days ahead.

The online provider of financial services Friday has arranged to acquire about 5.4 percent of its outstanding stock from its single-largest shareholder Softbank and has upped its 2002 earnings guidance 10 cents per share, from 40 cents to 50 cents EPS.

It has arranged to acquire 20 million shares of its common stock from Softbank for about $145.6 million. The deal sets the price per share at $7.28, a 13-percent discount from the 20-day moving average of the E*Trade common stock.

Softbank will remain a large stakeholder in the company. E*TRADE said it has an aggregate ownership of 33 million shares, which represents about 9 percent of the issued and outstanding common stock.

"The repurchase of a block of shares at this price offers an extremely compelling value-creation opportunity for the company and its shareowners and reflects our increasingly optimistic view of the future," said Christos M. Cotsakos, chairman and chief executive officer of E*TRADE. "This further reinforces our commitment to increasing shareowner value as we continue to execute on our strategy of building a strong, diversified financial services company."

As for Softbank's decision to divest 20 million shares, E*TRADE said the transaction was consistent with Softbank's policy of diversifying its holdings through occasional sales of stock in its portfolio companies.

"We remain confident in the direction and the leadership of E*TRADE and believe that they are extremely well positioned for continued growth and success," said Ron Fisher, vice chairman of Softbank Holdings Inc. and director of E*TRADE Group.