Shares in several of the world's largest stock exchanges jumped yesterday in anticipation of consolidation, as the NYSE Group cleared one of the main barriers to its participation in this activity.
The group announced late on Thursday it had raised $1.54 billion (€1.21 billion) through a secondary offering of stock, mostly sold by former New York Stock Exchange seat holders. This move had depressed the price to $62.88, below the $67 per share at which the company went public in March.
However, NYSE shares rose 6 per per cent to $66.55 in afternoon trading.
The group had been unable to approach possible merger partners before the offering was completed, although it warned in a regulatory filing that it had held talks about possible deals and that it might have to act quickly to fulfil its strategic objectives.
While the NYSE was awaiting completion of the offering, its smaller rival Nasdaq purchased a stake in the London Stock Exchange of 18.7 per cent, not large enough to frustrate a bid by the NYSE but enough to compel it to act with some urgency.
Some sources said that Euronext, as well as the London Stock Exchange, could be a partner or target.
Yesterday, shares in the LSE closed 12p higher at 1260p in heavy trading.
Shares in Paris-based Euronext closed €2.43 higher at €75.75.
A block of its largest shareholders have been pressing the Paris-based, Dutch-listed exchange to merge with Deutsche Börse, its larger Frankfurt rival, whose business model it closely mirrors.
However, Euronext's management has demurred, saying it is keeping all options open and has hinted at overtures to US-based exchanges. John Thane, NYSE chief executive, has said he is interested in gaining a foothold in the core derivatives business such as Euronext's Liffe futures subsidiary. Euronext is understood to be seeking meetings with its shareholders ahead of its annual meeting on May 23rd to explain its strategy.
But as speculation mounts that the NYSE is most keen to do a deal with the LSE, there is growing expectation that Euronext may ultimately have to come to an agreement with Deutsche Börse if it wants to participate in consolidation.
Deutsche Börse's shares closed 5.35 per cent higher at €119.35, aided in part by better than expected earnings.
Some analysts said Icap, the interdealer broker, was the most likely acquisition and the best fit with the NYSE. Icap owns the Brokertec dealing platform and an acquisition would give the NYSE a foothold in the treasury, sovereign debt and foreign exchange marketplaces.
- (Financial Times service)
