An acquisition is the best use of TD Ameritrade Holding Corp’s hefty cash cushion, its chief executive told Reuters on Wednesday, adding that the online brokerage would be interested in a deal involving smaller rival E*Trade Financial Corp under the right circumstances.Fred Tomczyk told the Reuters Global Finance Summit in New York that the company is primarily interested in a deal involving other online brokers, and that it would be prudent to eventually pay a dividend.
The company has been an aggressive acquirer in the last few years. It has about $1.4 billion in corporate cash, and management has said it is considering an acquisition, dividend, or share buyback.
“The best deployment of our cash would be in a transaction, but you have to see the opportunity to have a transaction that makes sense,” says Tomczyk. “With the kind of cash we’re generating on a consistent basis, at some point a dividend I think is a prudent thing to do.”
Asked whether TD Ameritrade would consider a deal involving E*Trade — a company troubled by the mortgage crisis but now starting to recover.
“We’d be interested but it has to be on the right terms with the right structure, says Tomczyk. We have a very clean balance sheet, so we don’t want to buy a bunch of problems.”
The full text of the story is on Reuters.com.
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