IntercontinentalExchange Inc (ICE), the energy and commodity futures bourse that helped make a hostile bid for NYSE Euronext last year, is now in talks to acquire the owner of the New York Stock Exchange (NYSE), according to a person with direct knowledge of the matter.
The cash-and-stock proposal may be announced as soon as this week, said the source, who declined to be named because the talks are private.
ICE’s bid with Nasdaq OMX Group Inc for NYSE Euronext last year was rejected by the US Justice Department over concerns the combination would dominate US stock listings.
Combining the owners of the biggest US stock exchange and the second-largest futures market would mark an unusual success after more than US$32 billion in exchange offers have failed since October 2010.
The bid shows increasing demand by exchanges to reduce costs and expand product offerings amid increasing competition. It also underscores the diminishing influence of the 220-year-old New York Stock Exchange.
NYSE Euronext shares jumped almost 30 percent after US exchanges closed on Wednesday, when the Wall Street Journal first reported the negotiations.
ICE, founded 12 years ago in Atlanta, has a market value of US$9.3 billion after its shares rose 6.4 percent this year, according to data compiled by Bloomberg.
NYSE Euronext, whose stock fell 7.9 percent this year, has a capitalization of US$5.8 billion.
Its shares closed at US$24.05 on Wednesday and rose as much as 29 percent to US$31 in US after-hours trading.
Richard Adamonis, a spokesman at NYSE Euronext, said the company does not comment on rumors. Brookly McLaughlin, an Intercontinental spokeswoman, said the company does not comment on rumors or speculation.
ICE, led by chief executive officer Jeff Sprecher, joined NASDAQ OMX chief executive officer Robert Greifeld in an unsolicited bid for NYSE Euronext in April last year. The offer, scuttled by the US Justice Department seven weeks later, sought to derail NYSE’s pending merger agreement with Deutsche Boerse AG.
The merger with Deutsche Boerse was rejected by European competition authorities in February.
NYSE Euronext subsequently began a cost-cutting plan known as Project 14, and said on Nov. 6 that it generated savings of US$82 million so far this year, 33 percent of the total US$250 million expected by the end of 2014.
In addition to the New York Stock Exchange, the company operates bourses in Paris, Lisbon, Brussels and Amsterdam, as well as the London-based Liffe, Europe’s second-largest derivatives market.
NYSE’s adjusted earnings were US$653 million last year on revenue of US$4.6 billion.
The company, run by chief executive officer Duncan Niederauer, posted profits of US$357 million in the nine months through Sept. 30, down 32 percent from the same period last year.