This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

NYSE Moves On While Deutsche Boerse Stands Ground

P/>NEW YORK ( TheStreet) -- Even though NYSE Euronext (NYX) is moving on from its $7.4 billion scuttled merger with Deutsche Boerse, the European exchange will continue to contest an antitrust ruling blocking the deal that it called, "a black day for Europe and for its future competitiveness on global financial markets."

On Thursday NYSE Euronext said that it won't join its former partner in contesting the ruling. "While we continue to believe that the European Commission decision was based on an incorrect determination of the relevant market definition, we do not believe that the interests of our shareholders and our company would be served by undertaking a protracted appeal," NYSE Euronext said in a statement.

The proposed deal would have created the largest stock and derivatives exchange in Europe and one of the largest in the world, further tying NYSE Euronext's fate to the struggling region, while providing Deutsche Boerse entry to now rebounding U.S. markets.

While NYSE Euronext has moved on from the deal, Deutsche Boerse said earlier in March that it will contest a ruling by the European Commission that the merger would make some markets too concentrated.

The NYSE is moving ahead with plans to return $550 million to shareholders as it tries to continue growing earnings per share and operating profit margins. While NYSE investors reacted strongly to the deal breakup and capital return program in February, pushing shares over $30, Deutsche Boerse seems to be in far worse spirits on the deal breakup.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player





European officials rejected the merger, calling it a "near-monopoly" in European exchange-traded derivatives.

The deal would have concentrated 90% of European exchange-traded derivatives markets and just under a third of equities trading under one operator. Both companies made attempts to quell competition concerns by opening the businesses to rivals and divesting some pieces; however in its rejection, European Commission called for the divestiture of either NYSE Euronext's Liffe platform or Deutsche Borse's Eurex business, two keys to the deal.

NYSE Euronext shareholders and analysts may cheer the decision to walk away, after the company announced a capital return program could grow to $1 billion. Meanwhile, the move may allow the company to consolidate its European exposure, instead of expanding it.

"Volume in NYX's four transaction businesses are all down year-over-year , and we believe the European businesses in particular could continue to experience headwinds," wrote KBW analyst Niamh Alexander of the company's fourth quarter earnings in February. Alexander rates shares a "market perform" with a $30 price target.

" We continue to view the standalone business as attractive at current levels... We also believe some investors prefer the standalone case as it keeps exposure to a challenging macro environment in Europe in check," wrote UBS analyst Alex Kramm in a February note. Overall, NYXE Euronext warrants a $31.73 a share price target, according to consensus estimates compiled by Bloomberg, with 10 "buy" and "hold" ratings, respectively and one "sell" rating.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
NYX $0.00 0.00%
AAPL $128.95 0.00%
FB $78.99 0.00%
GOOG $537.90 0.00%
TSLA $226.03 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs