Bloomberg News

NYSE Said to Choose JPMorgan, Societe Generale for Euronext IPO

August 20, 2013

NYSE Said to Choose JPMorgan, Societe Generale for Euronext IPO

The initial public offering would end an experiment to unite the biggest U.S. and European stock-exchange operators that began in April 2007 after New York-based NYSE Group acquired Paris-based Euronext NV for $14.3 billion. Photographer: Mario Proenca/Bloomberg

NYSE Euronext, the bourse operator being acquired by IntercontinentalExchange Group Inc., has tapped JPMorgan Chase & Co. and Societe Generale SA (GLE) to help arrange the initial public offering of its European equity operations, four people with knowledge of the matter said.

A stake in the Euronext unit, which controls markets in Paris, Lisbon, Brussels and Amsterdam, may be sold next year, said the people, asking not to be named because the information isn’t public. The sale could raise about 750 million euros ($1 billion), though the final size of the deal hasn’t been determined yet, two of the people said.

The IPO would end an experiment to unite the biggest U.S. and European stock-exchange operators that began in April 2007 after New York-based NYSE Group acquired Paris-based Euronext NV for $14.3 billion. Jeffrey Sprecher, chief executive officer of IntercontinentalExchange, said in December that the European business would be reviewed for a possible sale.

Sprecher’s company agreed nine months ago to buy the New York Stock Exchange owner for cash and stock worth about $8.2 billion at the time.

French financial regulators want to know the plans for Euronext before approving ICE’s acquisition of NYSE, two people said. IntercontinentalExchange, the Atlanta-based futures market known as ICE, will retain the London-based Liffe derivatives venue, which was part of NYSE’s Euronext acquisition six years ago.

Regulatory Approval

“We do not have any comment except that we remain focused on securing the final regulatory approvals in Europe,” Claire Miller, a spokeswoman for ICE said yesterday. Adaora Anunoby, a spokeswoman for NYSE Euronext (NYX:US) in London, declined to comment, as did officials at JPMorgan, Societe Generale and France’s Autorite des Marches Financiers regulator.

U.S. securities regulators approved ICE’s acquisition of NYSE Euronext last week, bringing the company one step closer to completing the transaction. The merger still requires approval from individual country regulators in Europe.

ICE is buying the U.S. equity-exchange operator as the profitability of stock trading declines while derivatives generate more income. European Union regulators approved the deal on June 24 after blocking Deutsche Boerse AG (DB1)’s purchase of NYSE last year, citing concern over competition in derivatives and post-trade clearing.

NYSE Brand

IntercontinentalExchange, which bought the New York Board of Trade in 2007 and renamed it ICE Futures U.S., has said it will keep the NYSE Euronext brand. The merged company will maintain dual headquarters in Atlanta and New York.

Sprecher said Aug. 6 that the exchanges expect the deal “will be finalized this fall.” Shareholders of both companies approved the transaction in June.

Merging NYSE Euronext with the second-largest futures market underscores both the growing importance of derivatives and the diminishing influence of the New York Stock Exchange, founded more than two centuries ago under a buttonwood tree in New York.

Populist outcry, antitrust concern and some of the most volatile markets on record have prevented the completion of more than $32 billion in announced exchange transactions, according to data compiled by Bloomberg on deals since October 2010 that were valued at $1 billion or more.

When Euronext NV sold stock in an IPO in July 2001, the exchange received a valuation of 2.8 billion euros. The company raised 400 million euros selling 16.7 million new shares and existing investors sold 12.2 million shares.

To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net; Ruth David in London at rdavid9@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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