NYX Nyse Euronext

IntercontinentalExchange Inc. (ICE) and Nasdaq OMX Group Inc. (NDAQ) on Monday called for NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE) to explain how those exchange companies came up with newly increased synergy targets detailed late Sunday.

An additional EUR100 million in cost savings estimated by NYSE Euronext has come only after ICE and Nasdaq OMX submitted their own proposal to buy the NYSE, which the rival suitors say tops the Big Board's agreed terms with Deutsche Boerse.

"NYSE Euronext should describe these newly-found synergies in detail in order to support the credibility of these revised estimates, particularly in light of commitments to retain two technology platforms and two headquarters," representatives for ICE and Nasdaq said in a statement Monday.

Raised estimates for cost-cutting under the NYSE-Deutsche Boerse plan--with no increase in the price offered for NYSE Euronext shares--suggests an "unexplained shift in strategy" and appears aimed at "protecting" the agreed transaction at the expense of stockholders, according to Nasdaq OMX and ICE.

A spokesman for NYSE Euronext declined comment Monday.

All four exchange operators are jockeying ahead of NYSE Euronext's annual shareholder meeting scheduled for Thursday, where otherwise-cursory votes on board members and governance policies are being closely watched for signals of shareholders' thinking.

Some investors have been frustrated by the NYSE Euronext board refusing twice in the last two weeks to engage with ICE and Nasdaq OMX, or push for improved terms from Deutsche Boerse.

Duncan Niederauer, chief executive of NYSE Euronext, said Sunday that the work done since NYSE and Deutsche Boerse announced their intention to combine in mid-February has allowed them to identify EUR400 million in cost savings, or $584.46 million, up from an initial estimate of EUR300 million.

He also said that the exchange groups' customers would see $3 billion in savings through the combination of European futures and options-trading platforms. Niederauer's comments came in an interview with the Financial Times.

Adding topped-up cost savings estimates to an anticipated $133 million in revenue synergies in the Deutsche Boerse deal adds up to about $717.5 million in deal synergies, helping NYSE Euronext's preferred combination close a gap with higher figures touted by ICE and Nasdaq OMX.

Those exchange groups have said they could together realize about $740 million in synergies with a plan to buy NYSE Euronext and split derivatives from equities- and technology-related businesses. NYSE Euronext's board has refuted the idea, calling it fraught with regulatory risk tied to the combination of nearly all U.S. share listings under one parent.

ICE and Nasdaq OMX have argued that they can do a better job making NYSE Euronext's businesses more profitable than the Big Board can in its deal with Deutsche Boerse, which is seen more limited in the way of eliminating staff and corporate overhead, due to the carefully constructed governance balance between the U.S. and German sides.

"Increasingly it appears that NYSE Euronext is more focused on protecting the transaction than its stockholders," ICE and Nasdaq OMX said in their Monday statement.

U.S. Sen. Charles Schumer (D., N.Y.) on Monday is expected to formally press Nasdaq OMX and ICE for estimates as to how much U.S. staff they aim to cut in their deal. NYSE Euronext has previously estimated that combining with Nasdaq would see 1,000 to 1,100 U.S. positions eliminated, according to a person familiar with the matter.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com.

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