Cubs buyers sell part of TD Ameritrade stake

OMAHA, Neb. -- The family of TD Ameritrade founder Joe Ricketts will sell 34 million of its shares in the online brokerage back to the company in a deal valued at almost $403 million to help finance the family's bid to buy the Chicago Cubs.

Ameritrade announced the stock purchase agreement Wednesday morning before its annual shareholders meeting.

Ameritrade agreed to pay the Ricketts family $11.85 per share. After the transaction, the Ricketts family stake in the company will shrink from about 22 percent of Ameritrade's stock to about 17.7 percent.

The Ricketts family will control two seats on Ameritrade's board instead of three after the deal.

Ameritrade said the purchase of the Ricketts' shares will complete its existing planned buyback programs, including the 28 million shares it planned to repurchase as part of its pending acquisition of thinkorswim Group Inc. Ameritrade's shares gained 2 cents to $12.58 in late afternoon trading Wednesday.

Last month, the Cubs' owners at Tribune Co. chose to enter exclusive negotiations with the Ricketts family.

"Our family is working to close a deal for the Chicago Cubs, and we are pleased to have reached a mutually beneficial agreement with the company that will help us to do so," Joe Ricketts said in a statement.

The Ricketts family said last month that its winning bid for the Cubs was worth about $900 million, and it would include Wrigley Field and a 25 percent interest in a regional sports network. But the family still must reach a final agreement with Tribune, which filed for bankruptcy protection in December.

In addition, a sale must be approved by Major League Baseball team owners.

One of Joe Ricketts' sons, Tom, has represented the family in its bid to buy the Cubs. Tom Ricketts is an Ameritrade board member, and he is chairman and CEO of Chicago-based investment bank InCapital LLC.

Tom Ricketts said Wednesday the negotiations with Tribune are ongoing, but he declined to comment on any details of the deal.

Ameritrade shareholders gathered in Omaha Wednesday morning to hear the online brokerage's new CEO give an update on the company's health. Shareholders also elected five directors and endorsed the company's choice of Ernst & Young as auditor.

Chief Executive Fred Tomczyk said Ameritrade has no interest in government assistance and no need for the bailout many financial institutions have received.

Ameritrade has avoided most of the problems that plagued other financial services companies, because it didn't invest in U.S. subprime mortgages.

Even so, the recession has made Ameritrade cautious.

"We are not immune to the headwinds going on in this current environment," Tomczyk said. "No one is immune."

Last month, the company announced plans to cut $60 million in expenses, and Tomczyk said Wednesday that 160 jobs had been eliminated, throughout the organization and at all levels.

Tomczyk predicted that the earliest the economy might start to recover would be in late 2009. But before the economy can rebound, he said, the housing market must stabilize and bank balance sheets must be cleaned up.

"This is a complicated problem," he said.

Tomczyk has been leading the Omaha-based company since October, and Wednesday's annual meeting was the first at which he presided.

The brokerage predicted that its 2009 earnings will end up between 90 cents and $1.15 per share.

Ameritrade said Tuesday that it handled an average of 306,000 trades per day during January. That was 8 percent from the 346,000 trades a day Ameritrade handled last January, but it was up 1 percent from December.

The company is also working to persuade investors to allow Ameritrade to handle more of their money. One of Ameritrade's long-term goals is to increase the amount of revenue it generates from asset-based fees, because they are less volatile than transaction-based trading fees.

Last month, Ameritrade announced plans to buy options trading specialist thinkorswim in a cash and stock deal worth roughly $606 million. Ameritrade officials said the thinkorswim deal, which is expected to close within six months, will strengthen the brokerage's trading business and add better tools for advanced options trades.