Euronext rejects bid from Deutsche Boerse

23rd May 2006, Comments 0 comments

23 May 2006, AMSTERDAM/FRANKFURT - Shareholders in the European bourse Euronext Tuesday rejected by a large majority a motion backing a merger with Germany's Deutsche Boerse.

23 May 2006


AMSTERDAM/FRANKFURT - Shareholders in the European bourse Euronext Tuesday rejected by a large majority a motion backing a merger with Germany's Deutsche Boerse.

The shareholders voted down a motion that the improved bid put forward earlier Tuesday by the Frankfurt-based exchange was in the interests of all Euronext shareholders.

Euronext management backed a merger bid by the New York Stock Exchange (NYSE), but did not make a formal recommendation to shareholders in this regard.

In documentation released during a lengthy annual general meeting held in Amsterdam, the supervisory and management boards of the four- country bourse highlighted the NYSE bid as "the most attractive."

The NYSE bid offered the "best price" and the "greatest synergies," Euronext's boards said.

An extraordinary general meeting of shareholders would be "convened as soon as practicable to approve a transaction," Euronext's managers said in an indication that at least part of the years-long battle for control of the world's most important stock exchanges would soon be brought to a head.

Earlier Tuesday, Deutsche Boerse launched a rival bid to surpass that posted by the NYSE on Monday. The part-share, part-cash bid was valued at 8.6 billion euros (109 billion dollars) at Monday's closing prices.

The NYSE bid - also part-share, part-cash - was valued at 8 billion euros.

Euronext shares fell some 9 per cent in Monday trading, but recovered some of the lost ground to trade midday Tuesday at a little under 70 euros.

A merger with the NYSE would create the first transatlantic bourse, with centres in Paris, Amsterdam, Brussels and Lisbon, along with New York.

Also part of the deal is Euronext's LIFFE (London International Financial Futures and Options Exchange). The combined bourse would be valued at 21 billion dollars and be the world's largest.

The proposal from the Frankfurt-based Deutsche Boerse would create a euro-zone mega-exchange that would probably over time suck in other exchanges in the European Union.

The other main players in the struggle are the London Stock Exchange (LSE) and the US electronic exchange NASDAQ, which are also thought likely to merge. Earlier this month, NASDAQ raised its stake in the LSE to 24 per cent.

Both Euronext and Deutsche Boerse have in the past attempted to merge with the LSE.

Euronext was created in September 2000 as a holding company based in the Netherlands.

DPA

Subject: German news

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