August 7, 2022

DealBook: Deutsche Börse Gaining as Deal Deadline Nears

The Frankfurt Stock Exchange in Germany is operated by Deutsche Börse.Alex Domanski/ReutersThe Frankfurt Stock Exchange in Germany is operated by Deutsche Börse.

7:32 p.m. | Updated

Deutsche Börse said on Wednesday that it had collected a majority of its shares through a tender offer tied to the German exchange operator’s proposed $9 billion merger with NYSE Euronext, but it was still short of its goal.

By Wednesday afternoon, Deutsche Börse said that it had received 60.2 percent of outstanding shares. But under German market rules, it must collect 75 percent by midnight Central European time.

The exchange operator does not expect to know the final tally until later this week, possibly not until Friday. In last-minute discussions this week, Deutsche Börse told investors it would not extend the deadline.

The tender offer is the biggest hurdle yet for Deutsche Börse and NYSE Euronext. The exchanges are hoping to create a trans-Atlantic colossus in an industry that increasingly prizes scale and a global footprint.

Rivals have failed in their proposed market mergers. A tie-up of the London Stock Exchange and the TMX Group of Canada collapsed amid nationalistic concerns, while a regulator blocked a combination of the Singapore and Australian stock exchanges.

Deutsche Börse has made significant strides in the tender offer since July 6, when it reported having collected only 11.1 percent of its outstanding shares. On Tuesday, the company reported having received about 34.5 percent of shares.

Deutsche Börse and NYSE Euronext had argued repeatedly that the majority of shareholders would tender their holdings close to the deadline. Some investors had waited for the results of NYSE Euronext’s shareholder vote on the merger last Thursday before voting, to make sure that proposal passed. NYSE shareholders owning 65.7 percent of its stock approved the deal.

Last month, the two companies added a sweetener to the deal, promising to pay shareholders of the combined exchange operator a special dividend.

People close to the German market operator conceded that the results of the tender offer could be close, but remained hopeful that they would cross the 75 percent threshold.

But more hurdles remain since the deal must still be blessed by regulators on both sides of the Atlantic. While the merger is expected to easily win approval from American antitrust officials, their European counterparts could more closely scrutinize the proposal, given that the tie-up would combine two of the Continent’s big derivatives markets.

Legal teams for both companies have been meeting with European Union competition regulators, with the aim of reaching a second phase of the review next month. Deutsche Börse and NYSE Euronext officials hope to receive a final decision by early next year.

Shares in Deutsche Börse closed up 1.68 percent on Wednesday, at 53.29 euros. Shares in NYSE Euronext rose 1.99 percent, to $33.85.

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