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To: 2MAR$ who wrote (24)	6/1/1999 10:05:00 AM
From: djane	Read Replies (1) \| Respond to of 192

Check out the last sentence below Tuesday June 1, 8:53 am Eastern Time FOCUS-ETrade to buy Telebanc for $1.8bln in stock (adds details in paragraphs 7 to 9, analyst comment in paragraphs 10,11) NEW YORK, June 1 (Reuters) - In the first combination of an online broker with an online bank, ETrade Inc. (Nasdaq:EGRP - news) said Tuesday it will buy Telebanc Financial Corp. (Nasdaq:TBFC - news) in a stock deal valued at about $1.8 billion. Under the terms of the agreement between the companies, ETrade will exchange 2.1 of its shares for each share of Telebanc. ETrade said the deal will boost its earnings and revenues immediately upon closing, expected this fall. The agreement, approved by the boards of directors of both companies, comes as competition in the online-brokerage industry intensifies. The top U.S. securities firm, Merrill Lynch & Co. (NYSE:MER - news), said Tuesday it would launch a low-cost online trading operation in July. ETrade, based in Palo Alto, Calif., said the value of the deal with Telebanc was $1.8 billion, based on the companies' closing stock prices on Friday -- ETrade finished at $44.50, up $2.50, and Telebanc closed at $66.50, up $4.25. The deal values ETrade at $93.45 a share. The combination will allow Arlington, Va.-based Telebanc to link up with a fast-growing financial player and give ETrade a less volatile revenue mix by offering a range of financial services in addition to stock brokerage. Under the combined entity, customers will be able to complete a full range of transactions online, such as buying mutual funds, CDs and fixed-income securities, as well trading equities and paying bills. Following the merger, which is expected to be accounted for as a pooling of interests, Telebanc shareholders will own about 13 percent of ETrade's fully diluted common stock. ETrade said in a statement that it believes it will be well positioned to further expand its customer base and capture an even greater share of the market. A spokesman for the company could not immediately clarify the statement. Bill Burnham, an analyst with Credit Suisse First Boston, said in a research note that the merger ''marks an aggressive, though expected, move by E*Trade into the banking sector and heralds its expansion into other areas of financial services.'' ''We expect shares of other online financial service firms, such as Net.bank (Nasdaq:NTBK - news) and Nexcard (Nasdaq:NXCD - news), to trade up on takeover speculation following this announcement,'' he added. More Quotes and News: E Trade Group Inc (Nasdaq:EGRP - news) Merrill Lynch & Co Inc (NYSE:MER - news) NetBank Inc (Nasdaq:NTBK - news) NextCard Inc (Nasdaq:NXCD - news) Telebanc Financial Corp (Nasdaq:TBFC - news) Related News Categories: IPOs, options, US Market News Help Copyright © 1999 Reuters Limited. All rights reserved.