E*Trade (EGRP) had free checking and automatic cash balance transfer to interest bearing money market accounts for years. The only thing missing was ATM access. Finally the company is getting into internet banking in a big way by acquiring TeleBanc Financial for $1.8 billion. E*Trade is looking to dominate and become the financial services powerhouse of the future. How confident am I of this? My money is with E*Trade.
E*Trade Group, the second-largest online broker, agreed to buy TeleBanc Financial for about $1.8 billion, expanding into Internet banking, a person familiar with the transaction said. E*Trade will pay 2.1 of its shares for each of TeleBanc's, valuing the Arlington, Virginia-based company at $93.45 a share. The purchase, expected to be announced today, offers a 40 percent premium to TeleBanc's close Friday of 66.5. Palo Alto, California-based E*Trade wants to gain "a more stable earnings stream" with the acquisition of TeleBanc, said William Claxton-Smith, a fund manager at London-based Clerical Medical Investment, which has $37 billion under management. - News.com
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