DATEK FOR SALE
By ERICA COPULSKY
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February 12, 2002 -- Datek Online Holdings, all cleaned up after recently settling securities-fraud charges, is shopping for a potential buyer, sources familiar with the situation told The Post.
Jersey City-based Datek is said to have hired investment bank Morgan Stanley to handle the process, which may lead to a sale of the closely held online brokerage.
A Datek spokesman declined to comment on the matter, citing firm policy.
However, sources said that Datek has held discussions over the last few weeks with a handful of potential buyers, and at least one - E*Trade - has already submitted a bid for the company.
An E*Trade spokeswoman was not available for comment.
Other possible suitors may include TD Waterhouse, Bank of Montreal, Wells Fargo and J.P. Morgan Chase & Co.'s online brokerage unit Brown & Co., investment bankers said.
Talk of a possible Datek sale began circulating Friday after Putnam Lovell Securities analyst Richard Repetto said in a research note to clients that the online firm "is testing the acquisition waters."
Repetto said Datek could be worth about $600 million to $800 million. But bankers think it could be sold for as much as $1 billion or more.
To be sure, Datek has been the subject of takeover talk before without any sign of a deal taking place.
But this time may be different. Just a few weeks ago, the firm paid $6.3 million to settle federal charges that its former day-trading unit engaged in securities fraud in the late 1990s. With its dark past behind it, the firm is now free to pursue other options, including a sale.
Just over a year ago, private equity firms Bain Capital, TA Associates and Silver Lake Partners invested about $700 million, in part to buy out the majority stakes of Sheldon Maschler and Jeffrey Citron, two founders of Datek with a history of trading violations.
Some sources speculated that the private equity investors may be looking to monetize their investment.
Datek, the fifth-biggest online broker, with more than 80,000 online accounts, spun off its day-trading assets to another securities firm in 1998 and shuffled management to distance itself from Citron and Maschler. |
