TD AMERITRADE: JANA & S.A.C. Take Active Stake To Force Merger

JANA Partners and S.A.C. Capital Advisors notified TD AMERITRADE that their funds have an aggregate “economic interest” in approximately 50 million shares of TD AMERITRADE, amounting to 8.4% of the outstanding stock, and plan to acquire more; the funds also notified the company that they are looking to force the company to merge (business combination) with an industry peer.

Here is the intro from the Full SEC Filing:

On May 29, 2007, the board of directors of TD AMERITRADE Holding Corporation received a letter from two hedge funds, JANA Partners and S.A.C. Capital Advisors. In the letter, JANA Partners and S.A.C. Capital notified TD AMERITRADE that their funds have an aggregate “economic interest” in approximately 50 million shares of TD AMERITRADE, amounting to 8.4% of the outstanding stock, and in other correspondence notified TD AMERITRADE that each of them has sought regulatory approval to acquire additional shares in excess of $600 million. To the knowledge of TD AMERITRADE, neither JANA Partners nor S.A.C. Capital has yet publicly disclosed this increased ownership. In the letter attached below, these funds indicate they wish to see TD AMERITRADE pursue a business combination with one of its industry peers.

TD AMERITRADE is seeing shares up nearly 7% in after-hours trading.  E*TRADE (ETFC-NASDAQ) is actually flat after-hours and Charles Schwab (SCHW-NASDAQ) is trading up 2.5% in after-hours trading.

Jon C. Ogg
June 5, 2007

Jon ogg can be reached at [email protected]; he does not own securities in the companies he covers.