Euronext board favours NYSE offer at AGM

Euronext’s board looks set to use today’s annual general meeting in Amsterdam to build investor support for an €8 billion takeover bid from the owners of the New York Stock Exchange (NYSE). But shareholders still remain divided about the future of the pan-European exchange, with some major stakeholders still favouring a rival merger offer from Deutsche Börse.

Investors will today be presented with both offers before the board makes its final recommendations to an extraordinary general meeting to be held in the next few weeks. But the board made its preference clear in a controversial statement just hours before the AGM was set to start. “The supervisory board and managing board of Euronext consider that the transaction with NYSE currently offers the most attractive combination,” it read. “Both proposals will be explained to the shareholders at the AGM tomorrow.”

Two investment funds, The Children’s Investment Fund and Atticus, own stakes in both Euronext and Deutsche Börse. They are believed to favour the offer from the German exchange, which would see shareholders from both exchanges receiving a cash amount and a stake in a new joint company based on the volume-weighted three-month average market capitalisation ratio of the two companies. That would leave an ownership ratio of 57:43 at yesterday’s closing price, in favour of Deutsche Börse.

NYSE Group, by contrast, has offered Euronext shareholders the right to exchange each of their shares for 0.980 shares of a newly created NYSE Euronext stock and €21.32 in cash. While this offer calculates savings of €293 million, a combination with Deutsche Börse could create cost savings of around €300 million – although €60 million would be passed on in savings to customers.

Euronext has recently been at the centre of a round of merger and consolidation talks between the world’s exchanges. The pan-European exchange provides services for regulated stock and derivatives markets in Belgium, France, the Netherlands and Portugal. It also owns the Euronext.Liffe derivatives exchange in London.