So, why is the Deutsche Börse deal better for NYSE Euronext? That’s the question looming in the wake of an $11.18 bn bid by NASDAQ OMX and IntercontinentalExchange (ICE). As the battle for the NYSE intensifies, the parties are looking for new ways to press their cases.
The latest move, from NYSE Euronext, is to push the benefits of a Deutsche Börse transaction, which the company appears to prefer even at a lower selling price. On FT.com today, it’s noted that the acquisition target is ready to increase the cost savings from a Deutsche Börse acquisition by a third.
Originally pegged at €300 mn, Duncan Niederauer, CEO of NYSE, is now putting the number at around €400 mn.
There’s also a cost savings for clients touted, which Niederauer tells FT.com could reach $3 bn.
Given the size of the NASDAQ OMX/ICE bid, not to mention the strength of the financing behind it, NYSE and Deutsche Börse are now in a position where they need to demonstrate the upside of their transaction in the marketplace, especially if NASDAQ turns to NYSE’s shareholders for support in its takeover attempt.
NASDAQ’s offer for NYSE is approximately 13 per cent higher than that offered by Deutsche Börse, and is uninvited.
In addition to client and expense benefits, the NYSE is willing to do more to make the deal with Deutsche Börse palatable, says FT.com:
Mr Niederauer did not rule out sweetening the Deutsche Börse deal through special dividends or the promise of share buy-backs but said he remained confident the company could convince shareholders of the combination’s strategic merits.
The announcement comes ahead of NYSE’s annual meeting, which FT.com reports takes place this week, and a shareholder vote is scheduled for July 7, 2011.