With a mixture of vision and nostalgia, the seat owners of the New York Stock Exchange (NYSE) voted to acquire Archipelago Holdings Inc, a deal that will transform the 213-year-old Big Board into a for-profit company with new, high-tech trading capabilities.
More than 95 percent of the voting members approved the US$9 billion transaction, according to the NYSE. More than 90 percent of the exchange's 1,366 seats were represented in the vote, tallied on Tuesday in the exchange's sixth-floor conference room, considered a Wall Street institution.
"There certainly was some nostalgia there," John Thain, chief executive of the New York Stock Exchange, said in a conference call with reporters.
"A lot of attendees were members for many, many years, and they wanted to be present at this historic transaction and say that they were there," Thain said.
Archipelago shareholders, meeting in Chicago, approved the transaction earlier on Tuesday, though the margin of the vote was not disclosed.
The acquisition, expected to close late next month, will create a new publicly held corporation, NYSE Group Inc, with the exchange and Archipelago becoming divisions of the company.
The new stock will be listed on the NYSE as NYX one day after the deal closes. A secondary stock offering has been tentatively set for late February or March, Thain said.
Its storied history and iconographic status aside, the NYSE has been under heavy competitive pressure from the NASDAQ Stock Market and other electronic trading platforms in the past decade.
While the exchange prides itself in its floor auctions, which help reduce price volatility, modern stock traders have been drawn to NASDAQ's transaction speeds, where a penny price difference could mean thousands of dollars made or lost.
Some of that competitive pressure came from Archipelago itself, which has increased its share of NYSE-listed stock trades in recent years, but has also seen intense competition from other electronic trading platforms.
The new company will have the capability to not only trade stocks listed at the NYSE, but also NASDAQ-listed and over-the-counter stocks through Archipelago's electronic trading system.
The deal also increases the exchange's market share in exchange-traded funds and derivatives trading.
As the NYSE prepares to take on all-electronic rival NASDAQ, investors are likely to benefit from better transaction speeds as well as lower fees as the two major markets compete for business.
The transformation into a for-profit company gives the NYSE Group equity it can use for expansion and further acquisitions.
Under the agreement, NYSE seat owners will receive more than US$5 million for each seat, though just US$300,000 in cash. The rest will be stock in the new company, whose seat owners will be restricted in selling for up to three years.
Archipelago shareholders will have their shares transferred to the new company on a one-for-one basis.
While NYSE seat owners roundly approved the deal, a small group of dissidents, led by longtime seat owner William Higgins, had fought the deal in court, saying Goldman Sachs Group Inc's involvement in advising both Archipelago and the NYSE led to severe conflicts of interest.
Higgins settled last month after the NYSE agreed to have Citigroup author a fairness opinion on the deal. Citigroup concluded that the deal was fair to all involved.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats