The firm is representing The Toronto-Dominion Bank in connection with the sale of its U.S. brokerage business, TD Waterhouse, to Ameritrade Holding Corporation. In the transaction, (valued at $3 billion), TD Bank will exchange its shares in TD Waterhouse Group, Inc. for a 32% stake in Ameritrade, which will be renamed TD Ameritrade. Existing Ameritrade stockholders will receive a special cash dividend of $6.00 per share in connection with the closing, which will be funded in part by capital contributed to TD Waterhouse by TD Bank. Following completion of the transaction, TD Bank will commence a tender offer to acquire an additional 7.9% of TD Ameritrade. TD Bank will designate five of twelve members of the TD Ameritrade board of directors and has agreed to limit its ownership to a maximum of 39.9% until the third anniversary of the closing and a maximum of 45% until the tenth anniversary of the closing, subject to certain exceptions. Ameritrade will also sell its Canadian brokerage business to TD Bank for $60 million.
The Simpson Thacher team includes Lee Meyerson, Ellen Patterson, Doug Bacon, Reggie Chambers and Tony King (corporate), Gary Mandel and Sonita Bennitt (tax), Ken Edgar and Susan Kaufman (executive compensation and employee benefits), Gary Rice (bank regulatory), Jennifer Rackoff (intellectual property), Julie Levy (labor), summer associates Bill Fay and Nisha Singh and paralegal Scott Cross.
The announcement of the TD Waterhouse/Ameritrade transaction caps off a busy June for the firm's financial institutions practice. The firm also represents Federated Department Stores in its announced sale of approximately $6.6 billion of credit card assets to Citibank (announced June 2nd), Washington Mutual, Inc. in its announced $6.45 billion acquisition of Providian Financial Corporation (announced June 6th), and The Neiman Marcus Group, Inc. in its announced strategic alliance with HSBC Retail Services relating to the credit card operations of Neiman Marcus (announced June 8th), and represented Lehman Brothers and Ryan Beck & Co. in the completed $3.9 billion second-step conversion and stock offering of Hudson City Bancorp Inc. (completed June 7th), which was the largest equity offering ever for a U.S. financial institution and the 7th largest equity offering ever completed in the U.S. Finally, the firm also represented Goldman Sachs as financial advisor to Legg Mason in connection with its $3.7 billion swap of its retail brokerage operations in exchange for Citigroup's worldwide asset management business, as well its concurrent acquisition of an 80% interest in the Permal Group, a fund-of-hedge-funds manager, for an upfront payment of $800 million.