Softbank to Buy Stake in E-Trade

Softbank Corp., Japan’s largest software distributor and investor in online companies, agreed to pay $400 million for 27.2% of E-Trade Group Inc., the biggest Internet-based brokerage. Softbank paid $25.56 a share for 15.6 million new shares of Palo Alto-based E-Trade, close to the price the shares traded at shortly before trading was halted, before the announcement. E-Trade was last traded at $24.50 on Nasdaq, down $1.06, after hitting as high as $25.75. The Softbank investment adds to E-Trade’s already formidable cash hoard during a period of intense competition among online brokerages. E-Trade said it would use the proceeds of the sale to finance purchases both in its main brokerage business and in supplementary businesses. Softbank agreed to hold on to its E-Trade shares for two years and to not buy any more for at least five years.