NYSE Euronext shareholders gathered Monday in New York to vote
on a takeover offer from IntercontinentalExchange Inc. (ICE) might
raise a glass of something refreshing to the bureaucrats in
Brussels.
Big Board investors have been here before. Two years ago they
waved through a merger with Deutsche Boerse AG (DBOEF, DB1.XE) and
may have breathed a sigh of relief when European regulators, after
a lengthy review, blocked it on competition grounds seven months
later.
NYSE Euronext shares lost a quarter of their value before EU
antitrust eagles finally swooped on the proposed German tie-up. The
ICE plan's value, however, has marched towards $10 billion since it
was announced on Dec. 20, and NYSE's stock is up 69%.
Investors are certainly in a bullish mood. "It will easily
pass," said James Rothenberg, managing member of Complex
Enterprises LLC, which owns NYSE shares. ICE shareholders will vote
separately Monday in Atlanta, with an outcome seen to be just as
predictable.
European regulators remain prickly over exchange consolidation,
and the prospective partners still have some hoops to jump through,
notably in ironing out overlaps in the commodities business.
But there's none of what--with hindsight--seemed like obvious
deal breakers last time around. The Deutsche Boerse plan would have
united Europe's two largest derivatives platforms. The subsequent
offer from ICE and Nasdaq OMX Group Inc. (NDAQ) would have combined
the two largest U.S. equity trading operations.
ICE Chief Executive Jeffrey Sprecher has shaken off most of the
"What was he thinking?" chatter that followed the abortive spoiler
attempt with Nasdaq. The standalone bid for NYSE appears a more
fitting next chapter in a 13-year journey that has turned a former
power market into a commodities-trading powerhouse that's gobbled
exchanges on both sides of the Atlantic.
Mr. Sprecher, like Deutsche Boerse and others, has long coveted
the Liffe financial futures franchise run by NYSE out of London.
Contracts linked to benchmark interest rates are a missing piece in
ICE's offering, one he tried to fill by teaming with Nasdaq and
keeping only the futures business, leaving stocks to his U.S.
partner.
That effort was blocked by U.S. antitrust authorities worried
about handing over control of nearly all U.S. listings to Nasdaq,
but not before NYSE executives faced shareholders who wanted to
open talks with the suitors. NYSE never did--until last September,
when Mr. Sprecher broached the topic of a transaction with his NYSE
counterpart, Duncan Niederauer.
Securing the NYSE would give Mr. Sprecher the blockbuster deal
that has eluded him so far, after his previous failed attempt to
win the NYSE as well as an unsuccessful attempt to wrest the
Chicago Board of Trade from its sale to the Chicago Mercantile
Exchange in 2007.
His intervention in that case lifted the final purchase price
above $10 billion from $8 billion as the suitors traded offers.
"This is going to be a big win," said Judd Gregg, the chief
executive of the Securities Industry and Financial Markets
Association and former Republican senator, who sits on ICE's board.
"This is a guy who 10 years ago had an idea, and now he's going to
take it and buy the New York Stock Exchange."
Write to Jacob Bunge at jacob.bunge@dowjones.com
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