NYSE Wins Euronext Backing for $10.2B Bid
Monday May 22, 11:09 pm ET
By Toby Sterling, Associated Press Writer
New York Stock Exchange Wins Euronext Management Backing for $10.2 Billion Bid
AMSTERDAM, Netherlands (AP) -- The New York Stock Exchange has won Euronext's tentative support for $10.2 billion offer to acquire the European exchange operator, outgunning a rival proposal from Germany's Deutsche Boerse before a key shareholder meeting.
NYSE Group Inc.'s cash-and-share bid was the "most attractive combination" on the table, Euronext said Monday, hours after the U.S. exchange unveiled its plan to create "the world's largest and most liquid global securities marketplace" with combined listings of $27 trillion.
But Euronext stressed that it would present both the NYSE and Deutsche Boerse proposals at its annual meeting in Amsterdam on Tuesday, and will not formally recommend the trans-Atlantic deal until it has heard shareholders' views.
The NYSE's move, worth $90.39 per Euronext share at Friday's closing prices, could also upstage its rival Nasdaq Stock Market Inc., which has acquired 25 percent of the London Stock Exchange PLC as a global race for consolidation gathers pace.
The combination would allow the NYSE to enter futures trading as well as European stocks, while straddling more time zones than any other exchange operator.
"This is consistent with our strategic objectives of both expanding geographically into Europe and expanding our product mix into derivatives," NYSE CEO John Thain said, adding that he hoped to reach a definitive deal by Wednesday.
Responding to the NYSE offer, Euronext said its top managers and supervisory board, which met Monday afternoon, "consider that the transaction with the NYSE currently offers the most attractive combination."
Euronext, which runs the Paris, Brussels, Amsterdam and Lisbon exchanges, has come under heavy pressure to merge with Deutsche Boerse from a group of hedge funds controlling an estimated 20 percent of its capital -- many of which also own stakes in the German exchange.
Deutsche Boerse has not publicly declared the value of its offer for Euronext or said whether it includes any cash. But it told Euronext managers that its proposed "merger of partners" would be valued according to volume-weighted average share prices over the three months to deal closure. Such a bid would be worth $82 per share at Friday's close.
The Frankfurt exchange's plan would also run the risk of intervention by EU antitrust authorities or the French Finance Ministry, which said Friday that its one-stop trading, clearing and settlement model should not be extended to the rest of Europe. Deutsche Boerse has refused to spin off its derivatives clearing and settlement arms as part of any deal.
Deutsche Boerse declined to comment on the Euronext statement or on whether it might improve the terms of its offer. The company earlier denied a report that it was mulling a new bid at $115 per share but said it "remains in contact with Euronext."
Atticus Capital LLC, one of the Euronext shareholders that had pushed for a deal with Deutsche Boerse, last week said it was "open-minded" about a tie-up with NYSE, in a sign that the campaign could wilt.
Atticus, which holds about 9 percent of Euronext, declined to comment on the NYSE offer, which would create a combined exchange operator with a market capitalization of $21 billion.
Deutsche Boerse AG shares fell 8.5 percent to close at $129.48 in Frankfurt. Euronext NV shares dropped 9.5 percent to $86.34 in Paris, while in New York, NYSE shares fell 1.8 percent to $63.33.
Associated Press business writers Laurence Frost in Paris and Michael J. Martinez in New York contributed to this report.
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