Euronext Rejects Deutsche Boerse Bid

Elena
23 May, 2006
New York City

Euronext said that the new details of the bid were misleading and said that the $10.2 billion offer by the New York Stock Exchange remained more attractive. The plan from Deutsche Boerse would include 870 million euros in cash for Euronext shareholders, lower than the 2.4 billion euros cash element of the NYSE offer.

[R]8:00AM Euronext declined an $11 billion bid from Deutsche Boerse.[/R]
Euronext declined an $11 billion takeover offer from Deutsche Boerse. The European stock-exchange operator said that the new details of the bid were misleading and said that the $10.2 billion offer by the New York Stock Exchange remained more attractive. Euronext said that was 'misleading, because the proposal is based on the three-month, volume-weighted moving average prior to the signing of a (merger) agreement.' The company said Monday that the NYSE Group Inc.'s cash-and-share bid was the 'most attractive combination' on the table. Chairman Jan-Michael Hessels confirmed at the meeting Tuesday that after a brief review of the offers, the boards consider that the NYSE offers the most attractive option.

The plan from Deutsche Boerse, operating the Frankfurt stock exchange, would include 870 million euros ($1.11 billion) in cash for Euronext shareholders, lower than the 2.4 billion euros ($3 billion) cash element of the NYSE offer. Deutsche Boerse's overall offer was worth 76.60 euros ($97.84) per Euronext share at Monday''s closing prices, or 10.2% above NYSE's bid. Deutsche Boerse has proposed folding itself and Euronext into a new company based in Frankfurt. 'Deutsche Boerse strongly believes that this transaction represents the most attractive combination for shareholders, customers and the financial centers involved,' the German exchange said in a statement. Deutsche Boerse also said it had identified savings, including in information technology, and revenue gains of about 300 million euros ($383 million) for the merged company and would pass on about 60 million euros ($77 million) of that to customers.

But the NYSE won Euronext's support for its 8 billion euro ($10.2 billion) offer that the U.S.-based exchange said would create 'the world''s largest and most liquid global securities marketplace 'with combined listings of $27 trillion. Deutsche Boerse shares rose 0.8% to 101.90 euros ($130.19) in Frankfurt, while Euronext shares gained 2.9% to 69.50 euros ($88.79) in Paris.


[R]7:30 AM Asian Markets close mixed. Japanese Nikkei slumps.[/R]
Asian markets closed mixed. Japanese benchmark, Nikkei 225 Average plunged on weak financial stocks, especially at the world''s biggest bank by assets, Mitsubishi UFJ Financial Group Inc., which declined 6.1% after releasing a guidance predicting a decline in 2006 profit. Japan''s No. 2 lender Mizuho Financial shed 4.8%. South Korean benchmark Kospi index edged 0.7% lower. Singapore bucked the downtrend to advance 0.53%. The late rally also boosted Jakarta''s Composite Index 1.32% and Kuala Lumpur which was up 0.11%. Australia S&P/ASX 200 dropped 0.3% while Hong Kong''s Hang Seng Index advanced 0.37%. Hong Kong’s oil companies advanced, after Monday''s sharp declines. Australia’s leading blue chips declined on continuing anxiety and volatility in commodity markets, with opinion split on whether the washout had come to an end.


[R]6:30AM European stocks bounce back on bargain hunting.[/R]
On the corporate front in early trading, Statoil, the Norwegian oil producer, advanced 4.6%, and Norsk Hydro, oil and metal corporation, edged 4% up. Likewise, Saipem, Italian oilfield group, climbed 3.3% and Atlas Copco, Swedish toolmaker advanced 4.4%. Euronext, European stock exchange operator, added 3.5% up, in the wake of Deutsche Börse, its peer, revealing a cash and stock merger plan. Technology stocks also performed well, ASML, Dutch maker of memory chips, climbed 5.1% and Telenor, Norwegian telecom, gained 2.7%.

Crude oil for July delivery advanced 34 cents to $70.30 a barrel and London July Brent gained 35 cents at $69.70. Gold hit a high of $663.30 an ounce and was quoted at $661.50/652.30. The dollar gained against the euro. The euro bought $1.2834, lower than $1.2864 late Monday. The British pound slipped to $1.8821 from US$1.8863 on Monday, though the dollar edged down to 111.44 Japanese yen from 111.50.