Nybot in Nymex sights

The New York Mercantile Exchange (Nymex) plans to buy the New York Board of Trade (Nybot) as part of its expansion and acquisition drive, according to Nymex president Robert Collins.

The energy and metals exchange is planning an aggressive acquisition campaign, capitalising on the trend for consolidation in the exchange business and looking to diversify its business. While Collins said any acquisition plans were still “premature”, he highlighted cotton, coffee, cocoa and sugar exchange Nybot as a prime candidate.

“We may have the opportunity to acquire Nybot, which we would be very open to. It’s a great way to diversify our products. We can consolidate some operating expenses and continue to add to our branding,” said Collins.

Talking of consolidation in the exchange business, Collins said Nymex “intended to very aggressively extend that pattern of development”, and said that “there’s going to be acquisitions which benefit and expand, and even diversify our business.”

But Collins dismissed rumours of Nymex making an imminent play for the London-based International Petroleum Exchange (IPE), owned by Atlanta-based Intercontinental Exchange (ICE).

Nymex has been widely reported as developing a hostile takeover plan for IPE and has been accused of visiting its shareholders to discuss such plans without talking to IPE itself.

IPE chief executive Richard Ward said: “If Nymex is serious [about IPE] it needs to do something rather than go round and see our shareholders and fuel these rumours.”But according to Collins, the recent Nymex visits to shareholders were part of everyday customer relationship building. “We had been very focused internally on changes we’ve made to our organisation technologically. I had not been personally engaged for a while talking to our customers and hearing the view from the trenches.”

Collins added: “I have the highest respect for Richard [Ward], but he’s not a customer of mine.”

The IPE issue has been no more than “a casual conversation” with the Nymex customers who own shares in IPE, according to Collins. “The devil is in the details – and we did not discuss [IPE] details [with these shareholders],” he said.

Nevertheless, most industry participants, including Nymex and IPE, agree an acquisition would be beneficial, both for the industry and for the IPE shareholders. IPE’s Ward says he can see great benefits for companies being able to put their business into one clearing organisation and enjoying offset margins as a result.

And one senior London based broker said: “ICE is desperate to find some route out, to get an exit from its IPE acquisition.”

ICE acquired IPE in July 2001 through a stock swap – at the time ICE was valued at $1.3 billion and IPE $130 million.