Potential suitors are upping the ante for privately held online brokerage
Datek Online Holdings Inc., and the dowry may reach into the $1 billion-plus
range.
Companies said to be interested in Datek include E*Trade Group Inc. , Ameritrade Holding Corp.
and Toronto-Dominion
Bank, which owns the Internet-based discount
brokerage TD Waterhouse.
Reuters quoted unnamed sources as saying that Jersey City, N.J.-based Datek
is drawing offers in the $1.2 billion to $1.6 billion range, and that Bank of
America apparently has dropped out of the running. Wells Fargo’s interest was
unclear.
Datek is owned by a group of private equity firms led by Boston-based Bain
Capital, which acquired a majority stake in December 2000 in a deal valued at about $700
million.
No matter how many bids are submitted, a final decision on a buyer is likely
to be at least a week away, sources said.
The online brokerage business has suffered during the recession, and analysts
have said Datek, ranking as the No. 5 pure-play online trading company with
about 841,000 accounts, was not expected to be quite so pricey.
Bidding has also been driven up by the fact that Datek has about $300 million
worth of cash on its books, sources told Reuters. Still, a price tag of
between $1.2 billion and $1.6 billion would value Datek at between $1,400 and
$1,900 per account, far higher than the $1,200 to $1,400 range analysts
expected.