Meanwhile, Deutsche Börse published its plans
for NYSE Euronext shareholders to tender their stock in return
for shares in a new Dutch holding company.
Speaking as the exchange revealed its first quarter
2011 financial results, Sprecher ramped up his appeal to the
target’s shareholders, accusing NYSE Euronext of
favouring the Deutsche Börse deal, which he described as
"full of empty promises". A merger with the German group would
lead to Liffe being "gutted", he said.
In a conference call with analysts and media,
Sprecher said ICE and Nasdaq OMX would submit a formal offer to
NYSE Euronext shareholders within weeks, after filing it with
the US Securities and Exchange Commission. The offer has been
valued at around $11bn.
The offer would be rushed out "for us to show an
alternative to the shareholders", as a vote on the proposed
deal with Deutsche Börse is scheduled within weeks.
ICE and Nasdaq have tried to persuade NYSE
Euronext’s board to enter talks with them, but
twice been rebuffed. NYSE Euronext’s board
described the offer as an "empty vessel".
The war of words has become increasingly heated
– Sprecher has called NYSE’s stance
"risky" and "absurd". Nasdaq and ICE believe they should
succeed because their cash and shares offer is worth more,
based on current share prices. They have sought to defeat
objections to their approach by matching the terms agreed with
Deutsche Börse and offering to pay a $350m break fee if
their bid is blocked by regulators, under certain
Claims of risks to Liffe
Sprecher also sought to win favour by painting a
bleak future for Liffe. "If the Deutsche Börse takeover
proceeds, [Liffe] would likely be gutted and for all intents
and purposes moved to Frankfurt to be subsumed as part of the
European product set within the Deutsche Börse," Sprecher
He claimed that if Liffe’s European
derivative markets came under the control of ICE –
which would happen if Nasdaq and ICE carried out their plan to
split NYSE Euronext between them – they would have a
Rejecting any suggestion that Nasdaq and
ICE’s offer was simply a "spoiler" to disrupt
their rivals’ plans, he said he had harboured
ambitions to control Liffe for the last decade.
"Euronext management and ICE met on a number of
occasions to discuss a Liffe and ICE combination to jointly
leverage our strong London-based franchises," Sprecher said.
"It has consistently been my view that we could combine Liffe
and ICE into a joint venture. This dialog continued after NYSE
acquired Euronext Liffe, ending in mid-2010."
Sprecher acknowledged that there was no way the two
US exchanges could secure NYSE Euronext through a hostile
takeover. "There is basically a pill in the NYSE charter that
says, if you own 20% of the stock or more, they get to buy the
stock back at basically a penny. So, no person including us or
Nasdaq with that condition in place can ultimately take over
the company," Sprecher said. "But the board works for the
shareholders and I would suspect that the board will get very
realistic when it sees a vast majority of its shareholders not
supporting the board’s deal and supporting another
deal. The board is going to have to take a look at its position
once it’s able to gauge the strength of our
proposal in the hands of the shareholders and I think
ultimately, it will work out just fine."
ICE’s first quarter net profits
totalled $129m, up from $119m in the same period last year.
Transaction revenues have grown on the back of strong growth in
futures trading, especially Brent and WTI crude, gasoil and
carbon emission futures, which it said grew 28%
Consolidated revenues grew 19% to $334m. Futures
transaction and clearing revenues grew 28% to $157m. Average
daily futures trading was 1.6m contracts, up 24% from the same
period of 2010.
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