Wit SoundView Grabs E*Offering

Wit Capital Group Monday acquired investment banking firm E*OFFERING for about $328 million in
stock.

E*OFFERING shareholders will receive approximately 32 million shares of Wit
Capital Group, representing approximately 25 percent of Wit Capital’s fully
diluted shares. E*TRADE Group, General Atlantic and SOFTBANK will
collectively own more than 25 million shares of Wit Capital Group , worth about $256 million.

The acquisition combines Wit SoundView’s strengths in
deal origination and its research model and institutional capabilities with
E*OFFERING’s technology platform and product capabilities.


E*TRADE’s Cotsakos and Bill Ford of General Atlantic Partners will join Wit
Capital Group’s board of directors. The deal will close in the third quarter
of this year.


Calling the purchase “aggressive,” Wit SoundView Vice Chairman, President
and Co-Chief Executive Officer Ronald W. Readmond,
said the move will bring Wit SoundView to the next level in positioning the
firm to compete successfully for lead manager roles in Internet and new
technology offerings.


The news is Wit Soundview’s first major deal since Wit Capital Group bought
SoundView Technology Group for $320 million in stock last November.

In a related development, E*TRADE Group
Inc.
and Wit SoundView sealed
an alliance to create a powerful new force in capital markets.


With an eye toward propelling the online investment banking and financial
services revolution that they helped put into play, Wit SoundView will be
the exclusive source of IPOs, follow-on offerings and other investment
banking products to E*TRADE
. E*TRADE will acquire Wit SoundView’s retail brokerage
business, representing approximately 100,000 accounts.

In addition, E*TRADE will purchase two million shares of Wit Capital Group
common stock, worth about $20.5 million. E*TRADE’s 2.6 million customers —
including Wit SoundView’s retail customers — will gain access to E*TRADE’s
products and services. These include securities research, the opportunity to
apply for participation in a range of Internet and technology-related IPOs,
follow-on offerings, private placements and VostockSM — the online auction
system forged last week by Wit SoundView and ITG Inc.


“With this strategic alliance, we are creating an Internet-driven category
killer that offers investors an expanded world of financial opportunities
that we believe will re-revolutionize the financial services space,” said
Christos M. Cotsakos, chairman of the board and chief executive officer of
E*TRADE.

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