HEDGE FUNDS

[SPIN]

Hedge funds push for TD Ameritrade merger
Stephanie Baum
07 Jun 2007

Two hedge funds are pushing for Canadian online broker TD Ameritrade to merge with a rival in the latest demonstration of investor activism.

Jana Partners and SAC Capital want TD Ameritrade to merge with online broker E*Trade Financial or US mutual and retirement fund provider Charles Schwab. They called for the brokerage to set up a special committee to investigate strategic alternatives for the company, according to documents filed with the Securities and Exchange Commission.

Joe Moglia, chief executive of TD Ameritrade, said at a Sandler O’Neill conference today the company was looking at offering a broader range of services for long term investors. When he was asked why the company had not merged with E*Trade and "what are you waiting for," Moglia said the company would only consider M&A deals if they were a suitable fit for the business.

"The risk associated with any of these trades is very, very significant and I have no problem taking a little longer if it is what is best for the company."

According to documents filed with the SEC, the two hedge funds have a combined stake of 8.4% in the business or 50 million shares and each has sought regulatory approval to buy shares worth another $600m (€444m).

In a letter addressed to TD Ameritrade’s board of directors, the hedge fund firms argue that the Toronto-Dominion Bank, which has a 40% stake in TD Ameritrade, is impeding a possible deal.

A recent report looking at investor activism from Wharton Business School found hedge fund firms make the best returns when pushing a company to sell. The report cited 98 examples in which companies averaged excess returns of 10.9% measured over 40 days before and after the hedge funds make their intentions known.

http://www.financialnews-us.com/?page=ushome&contentid=2447976749

no prob fringe. hopefully people will add to it over time, instead of always just shouting "Hedge Fund!!!" as a conspiracy theory focused on NSS.

the news above is really interesting though, in terms of guys like Steven Cohen (SAC) pushing for retail brokerages to combine (i could come up w/some possible conspiracy theories on that subject).

not saying that shorting micros doesn't happen, but from what i've seen so far, shorting is connected to financing.