Euronext Likes NYSE Bid

Management backs a proposal as a rival mulls its options.
Publish date:


management said Monday that the bid from the

NYSE Group


is the most attractive combination to company management, picking its favorite before the shareholder meeting Tuesday.

In another release, the company said that it had only received proposals from the NYSE and the

Deutsche Boerse

. Both proposals will be given to investors Tuesday at the shareholder meeting, where they will have the opportunity to vote on the best offer.

"The Supervisory Board and Managing Board of Euronext consider that the transaction with NYSE currently offers the most attractive combination," the release said. It did not give any further details regarding the Deutsche Boerse's proposal for the company.

Speculation about the NYSE's bid for the Euronext swirled over the weekend, and Monday morning, the company issued a press release unveiling a cash-and-stock offer for the European exchange. The offer valued the Euronext at $10.2 billion, and the combined company at about $20.7 billion. The Deutsche Boerse, which has been in merger talks with the Euronext for months, may now find itself scrambling ahead of the meeting tomorrow.

Shares in the NYSE were down $2.01, or 3.1%, to $62.49 during the session. NYSE shares had fallen as low as $60.08 in the session, its lowest point since the company merged with Archipelago on March 8.

While the NYSE seems to have won management's favor, a number of things could still hinder a deal. The main concern raised by analysts is the regulatory hurdles that both the NYSE and the Euronext will have to overcome in a merger.

"The only barriers will be regulatory, which is no small consideration," said Phil Guziec, equity analyst at Morningstar. "But the regulators face a scenario where they can help create some sort of global capital flows or essentially be called protectionists. So, there is still this regulatory dance."

Euronext also faces a vote from large shareholders Atticus Capital and TCI Fund Management, which own a combined $1.8 billion stake in the company. TCI has reportedly favored a Euronext tie-up with the Deutsche Boerse. Atticus has previously said in reports that it favored a Deutsche Boerse partnership, absent any other proposals, but it owns over $900 million in stock in NYSE, which could ultimately sway its vote.