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Deutsche Börse revamps Euronext bid; Nyse eyes London

20 June 2006  |  5780 views  |  0 Deutsche Boerse web screen shot

In a new attempt to woo Euronext away from its planned merger with the New York Stock Exchange, Germany's Deutsche Börse has modified its own proposed offer for the pan-European exchange which includes key concessions on technology and operations. The move follows news that Nyse could establish a UK market to rival the London Stock Exchange following its merger with Euronext.

Deutsche Börse says it has made structural changes to its proposed offer, but financial terms remain unchanged, although it claims that recent movements in share prices now make its offer more valuable than the Nyse bid.

The latest proposal includes key concessions, including the integration of Deutsche Börse's IT division Euronext's existing technology joint venture with Atos. The Börse says the combined division would act as a service provider to the organisation and would operate from hubs in Frankfurt and Paris.

The Börse says it would also streamline the group's trading infrastructure by adopting Euronext's NSC technology for cash equity trading and Eurex as the combined derivatives trading platform.

Furthermore, the Börse has also agreed that following a merger only German equities would be cleared via its Eurex subsidiary, while Euronext's clearing services would continue to be provided by LCH.Clearnet.

The re-vamped offer also proposes a new Dutch company to own the merged group, with regulation of the Euronext exchanges to remain as it is now. The board will consist of an equal number of representatives from both companies and divisional management of the merged group would be split so that information services were run out of Amsterdam, equities from Paris and derivatives from London and Frankfurt.

Euronext accepted a $10bn merger offer from Nyse earlier this month, although the deal still needs shareholder approval.

The pan-European exchange has not made any comment on Deutsche Börse's revised bid, but it is thought that it will continue to favour a merger with Nyse despite growing political pressure for it to consider a tie-up with a European partner. French president Jacques Chirac, Italian prime minister Romano Prodi and the European Central Bank president Jean-Claude Trichet have all come out in favour of a European tie-up rather than an transatlantic partnership.

Nyse chief executive John Thain has told reporters that that Deutsche Börse's revamped offer was not much different from a previous one and he saw no reason to change Nyse's merger agreement with Euronext.

In an interview with the Financial Times, Thain has also raised the prospect of Nyse starting up a London operation to compete with the LSE if a merger with Euronext did not attract enough international listings.

Thain also said Nyse could acquire the LSE if the proposed Euronext merger failed to meet business expectations.

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