NYSE merger deal fair, says new valuation

28 Nov, 2005

The New York Stock Exchange's deal to buy electronic trading company Archipelago Holdings Inc is "fair and equitable" to seatholders, according to a fresh valuation of the deal carried out by Citigroup Inc, the Exchange said on November 23.
The NYSE was pushed into doing the new valuation by a group of dissident seat holders, who took the Big Board to court in an attempt to delay the deal and improve terms for members.
In a letter to New York State Supreme Court Justice Charles Ramos, Citigroup's investment banking division said it was of the opinion that the deal was "fair, from a financial point of view" to NYSE seatholders.
The Big Board said in a statement the opinion reaffirmed its belief that the terms of the deal were "fair and equitable and that the merger is in the best interests of NYSE Members, the Exchange, and America's capital markets".
The dissident group, led by longstanding seat holder William Higgins, was particularly unhappy with the deal's terms, which they saw as short-changing NYSE members. The deal gives the 1,366 seat holders $300,000 each and 70 percent of the new company. The remaining 30 percent goes to Archipelago.
The NYSE reached a settlement with the Higgins group, announced in New York State Supreme Court last week, under which it agreed to undertake the fresh opinion. It had to be turned around in a tight timetable of a week in order to be made available to seat-holders before they vote on December 6.
Lawyers representing the seatholder group refrained from immediate comment on the new valuation. The original valuation was carried out by Lazard Ltd, which also found that the deal was fair to NYSE seatholders, according to an April filing by the Exchange. Greenhill & Co undertook the fairness opinion for Archipelago and also found the deal fair for Archipelago shareholders.

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