Bloomberg News

NYSE, Deutsche Boerse Settle Shareholder Suits Over Buyout

June 24, 2011

(Updates with details from settlement in 11th paragraph and share prices in 12th paragraph.)

June 24 (Bloomberg) -- NYSE Euronext and Deutsche Boerse AG settled shareholder lawsuits challenging the $9.53 billion buyout of the parent company of the New York Stock Exchange by offering earlier this month to pay $910 million in dividends, court papers show.

The agreement to pay the dividends helped to resolve suits in Delaware and New York alleging the all-stock deal provided too little for investors, according to a filing in Delaware Chancery Court. The payout totals about 620 million euros, equal to 2 euros a Deutsche Boerse share or $1.37 a NYSE share, company officials said June 7.

“We are pleased with the result here, because this dividend will give shareholders a quantifiable and immediate payment,” Mark Lebovitch, a New York-based lawyer for NYSE shareholders, said yesterday in an e-mailed statement.

Deutsche Boerse agreed to buy NYSE Euronext, owner of the New York Stock Exchange and the Liffe derivatives market, for $9.53 billion in February. IntercontinentalExchange Inc. and Nasdaq OMX Group Inc. dropped a competing bid last month after the U.S. Justice Department threatened an antitrust lawsuit.

‘Avoid Expense’

“The settlement allows us to avoid the expense and distractions litigating would have presented to our company and our shareholders,” Rich Adamonis, a spokesman for New York- based NYSE Euronext, said in an e-mailed statement. “Our sole focus remains on our upcoming shareowner vote, and working toward the successful conclusion of the merger.”

Tim Lynch, a spokesman for Frankfurt-based Deutsche Boerse, declined to comment.

The exchanges agreed to pay the dividends and settle the suit in hopes of winning support for the deal in a vote next month. Deutsche Boerse needs 75 percent of shareholders to approve its purchase of NYSE Euronext by July 13.

Investors can opt to “terminate the settlement” if the exchanges decide against paying the dividends, according to court papers.

NYSE Euronext investors sued in Delaware in February, calling Deutsche Boerse’s offer “grossly inadequate.” The shareholders alleged the bid valued NYSE Euronext at less than targets in similar deals, such as London Stock Exchange Group Plc’s purchase of Canada’s TMX Group Inc.

‘A Factor’

Officials of both exchanges acknowledged the lawsuits “were a factor” in the decision to pay the dividends, lawyers for NYSE Euronext investors said in court papers. The suits also helped persuade NYSE officials to give investors an opportunity to have the value of their shares appraised, according to the June 17 filing.

Delaware Chancery Court Judge Leo Strine must decide whether to give the accord final approval. He hasn’t yet set a hearing date on the matter. If the settlement is approved, investors’ lawyers will file papers to dismiss the New York suits, court filings show.

NYSE Euronext fell 45 cents, or 1.4 percent, to $32.31 in New York Stock Exchange composite trading at 11:52 a.m. Deutsche Boerse dropped 67 cents, or 1.3 percent, to 50.18 euros in German trading.

The case is In re NYSE Euronext Shareholders Litigation, CA No. 6220, Delaware Chancery Court (Wilmington).

--With assistance from Nandini Sukumar in London, Dawn McCarty in Wilmington and Nina Mehta and Michael Bathon in New York. Editors: Fred Strasser, Stephen Farr

To contact the reporter on this story: Jef Feeley in Wilmington at

To contact the editor responsible for this story: Michael Hytha at

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