DAVOS, Switzerland--NYSE Euronext (NYX) has no intention of
selling its European unit to a rival after its takeover by
IntercontinentalExchange Inc. (ICE), according to NYSE Euronext's
chief executive.
Duncan Niederauer told The Wall Street Journal that the combined
company would instead press on with a spin-off of Euronext, the
European electronic stock-exchange business that includes markets
in Paris, Amsterdam, Brussels and Lisbon.
The Euronext spinoff plan was first outlined last month when
NYSE Euronext unveiled its $8.2 billion takeover by ICE, partly to
allay potential nationalistic concerns that exchanges managed from
afar could diminish the influence of European financial hubs,
hurting their ability to control jobs and other aspects of the
businesses.
However, the proposed separation of Euronext, a top exchange
operator in the competitive European market, sparked interest from
rivals, according to people familiar with the situation.
Mr. Niederauer's comments are the clearest indication to date of
NYSE's determination to list Euronext separately in spite of that
interest.
Both Nasdaq OMX Group Inc. (NDAQ) and the London Stock Exchange
Group PLC (LSE.LN) have made informal inquiries about buying
Euronext, people familiar with the discussions said.
Nasdaq Chief Executive Robert Greifeld has told colleagues and
others outside the company that he would want to take a look at
Euronext if it were to become available, according to people
familiar with the discussions. A Nasdaq spokesman said Wednesday
that that remains the company's view, noting that Nasdaq's interest
wouldn't necessarily mean it would pursue a deal. An LSE
spokeswoman declined to comment on any potential deal interest.
Mr. Niederauer, in Davos for the annual meeting of the World
Economic Forum, declined to comment on the identity of potential
suitors.
But he said it "would not be in the interests" of the combined
company's shareholders to pursue a sale of Euronext.
Some regulators have also made clear to NYSE that the spin-off
was their preferred option, Mr. Niederauer said.
"What regulators want is stability," said Dominique Cerutti,
NYSE Euronext's deputy chief executive and a likely choice as CEO
of an independent Euronext. "I am not sure they are ready to
discuss whether they want consolidation" among exchange providers
in Europe.
NYSE Euronext has not disclosed Euronext's likely valuation in a
spin-off. The business carries relatively low profit margins, and
faces potential challenges from new European taxes on financial
transactions and increased regulation of automated trading.
NYSE Euronext has estimated that its European stocks and
derivatives business generated $560 million in revenue during the
12 months that ended Sept. 30. Sandler O'Neill + Partners estimated
a pre-tax operating margin of 25% for the business, compared with
ICE's profit margin of 60% for a company that is devoted nearly
entirely to derivatives trading and clearing.
An IPO of Euronext could value the unit at $1.39 billion,
according to an estimate from Equity Research Desk.
--Jacob Bunge contributed to this article.
Write to Francesco Guerrera at francesco.guerrera@wsj.com and
Jenny Strasburg at jenny.strasburg@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires