Nyse launches $10.2bn bid for Euronext

Nyse launches $10.2bn bid for Euronext

The New York Stock Exchange has unveiled a $10.2 billion (EUR8 billion) cash-and-share bid for Euronext, raising the prospect of a bidding war with Germany's Deutsche Börse for control of the pan-European exchange operator.

Nyse says its proposed merger with Euronext, which operates the Paris, Brussels, Amsterdam and Lisbon exchanges, would create a combined trans-Atlantic exchange with a market value of $21 billion (EUR16 billion).

The combined group, which would be headquartered in New York, would be known as NYSE Euronext and the value of the companies listed on the merged exchanges would be $27 trillion, nearly three times the size of the next largest marketplace.

Nyse says the merger would deliver cost and revenue synergies of $375 million.

Under the terms of proposal, 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 EUR21.32 in cash.

The offer values Euronext stock at EUR8 euros in total, or EUR71 euros per share - or EUR75 euros including ordinary and special dividends of EUR4 per share that Euronext has already said it would pay.

Commenting on the proposal, John Thain, CEO, Nyse Group, says: "Nyse Euronext will be the world's most liquid and truly global financial marketplace offering unparalleled benefits for investors and issuers in the United States, Europe and across the globe."

The merged company would be chaired by Euronext chairman Jan-Michiel Hessels while Thain would become chief executive.

Nyse's proposal comes a day before Euronext shareholders are due to meet at the company's AGM to discuss the future of the European stock exchange operator.

On Friday Deutsche Börse outlined its proposal for a merger with Euronext, which includes the establishment of a Dutch-based parent company and equal representation from the two exchanges on the merged entity's board.

The group's headquarters and the majority of its executive management would be based in Frankfurt, although its cash equities business would be based in Paris, while derivatives trading would be located in Frankfurt and London.

In a statement, Euronext says its supervisory board will meet this afternoon in advance of its AGM and will consider the two proposals received and other indications of interest. The proposals will be discussed with shareholders at the Euronext AGM tomorrow.

However, Thain has told reporters that he expects to have an answer from Euronext regarding the Nyse proposal within the next two days.

Update

Following the Nyse bid, Deutsche Börse has disclosed further details of its bid for Euronext, which at $11.1 billion (EUR8.62 billion) tops the rival offer made by Nyse.

Deutsche Börse says its proposed merger plan includes paying $2.6 billion (EUR2 billion) in cash to shareholders and would bring cost synergies worth around $383 million (EUR300 million).

In a statement the German exchange says its offer represents the most attractive combination for shareholders, customers and the financial centres involved: "It is the only option available at this point that accelerates to the further integration of European financial markets within a European regulatory environment."

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