Morgan Stanley, TD Ameritrade and E*Trade Financial appear to have common goals these days, thanks in part to hedge fund Citadel.  E*Trade Financial, which came under fire from hedge fund Citadel, its largest shareholder, announced last week it would seek a buyer for its business.  It then hired Morgan Stanley to assist in the process.  Last year, E*Trade retained JPMorgan for a strategic review.

Shortly after E*Trade's announcement, TD Ameritrade Holdings and Charles Schwab were mentioned as possible buyers.  Ameritrade's directors responded by scheduling a meeting on Tuesday to discuss the possibility of acquiring rival E*Trade.  The board meeting is being billed as nothing more than a preliminary discussion.  However, many benefits would accrue to TD Ameritrade by acquiring E*Trade.  E*Trade's client roster would fit well with Ameritrade's and E*Trades' assets would overlap with those of Toronto-Dominion Bank, which owns a minority stake in Ameritrade.  E*Trade currently has a stock-market value of around $4.4 billion. 

For further details, go to:  [WS Journal 7/25/11]