Fresh proposal

Paris, May 22 (Reuters): The New York Stock Exchange unveiled an 8-billion euro ($10.2 billion) share and cash bid for Euronext on Monday, countering a rival proposal from Deutsche Boerse just a day before a meeting where Euronext shareholders will decide on the future of the bourse operator.

The proposed alliance would create a transatlantic exchange giant with a market capitalisation of $21 billion and headquartered in New York, the NYSE Group Inc said.

The proposed merger would also yield cost and revenue synergies of $375 million, the NYSE said, which analysts said would be higher than the synergies of around 250 million euros that a Euronext-Deutsche Boerse tie-up would generate.

A source familiar with the situation said talks between NYSE and Euronext were “quite far advanced”.

Euronext said in a statement its board would meet on Monday afternoon to consider the two proposals and other indications of interest.

The operator of the Paris, Amsterdam, Brussels and Lisbon bourses, and of London’s Euronext.liffe derivatives exchange, had on Friday rebuffed a Deutsche Boerse offer as “nothing new”.

Deutsche Boerse on Monday denied a report in the Financial Times that it was considering a 90-euro-per-share bid for Euronext. “The payment of a premium to the respective enterprise values is not anticipated in the proposed transaction structure,” Deutsche Boerse said in a statement.

Economies of scale

The NYSE’s proposal is the latest salvo in a 17-month power struggle for global exchange consolidation, with Euronext talking first to the London Stock Exchange before turning to Deutsche Boerse and later the NYSE as the Nasdaq Stock Market Inc took 25 per cent on the LSE.

At stake is a need for exchange operators to consolidate to reach economies of scale, boost volumes and reduce trading costs for clients.

Under the terms of NYSE’s proposal, each share of NYSE Group will be converted into one share of common stock of the combined company, which will be named NYSE Euronext, NYSE said.

Holders of Euronext ordinary shares will be offered the right to exchange each of their shares for 0.98 shares of NYSE Euronext stock and 21.32 euros ($27.18) in cash.

The transaction is based on a fixed ratio of 1.4 shares of the combined company for each Euronext ordinary share, with 30 per cent of the aggregate consideration paid in cash.

Under the NYSE plan, NYSE Group chief executive John Thain would become the new entity’s chief executive, with Euronext chairman Jan-Michiel Hessels becoming its chairman.

Euronext chief executive Jean-Francois Theodore would become deputy chief executive officer.

The deal values Euronext at 8 billion euros in total or 70.9 euros per share, some 5 per cent below Euronext’s closing price of 74.60 euros on Friday. Euronext shares have surged nearly 70 per cent since the start of the year, and around 240 per cent since it declared an interest in acquiring the LSE.

Euronext shares were 1.9 per cent higher at 76 euros, while Deutsche Boerse’s shed 3.4 per cent to 107 euros.