NYSE Group, Inc. (NYSE: NYX):
-0-
*T
"On behalf of the NYSE Group Board of Directors, I would like to thank
the leadership of Euronext for the time spent to discuss and consider
this historic business combination, which will transform the global
financial marketplace. This transaction will produce significant
synergies, outstanding value and growth opportunities, as well as
tremendous benefits to all of our stakeholders, including
shareholders, customers, employees, issuers and investors."
--Marshall N. Carter, Chairman, NYSE Group, Inc.
"Euronext, under the leadership of Jean-Francois Theodore, is an
innovator with a proven track record of success that shares our vision
of the global financial marketplace. NYSE Euronext will be the world's
most liquid and truly global financial marketplace offering
unparalleled benefits for investors and issuers in the United States,
Europe and across the globe."
--John A. Thain, Chief Executive Officer, NYSE Group, Inc.
*T
NYSE Group, Inc. (NYSE: NYX) today confirmed in a letter to the
Chairmen of the Euronext N.V. Supervisory and Management Boards the
terms of a business combination proposal under discussion between NYSE
Group, Inc. and Euronext N.V. Attached is a copy of that letter, which
was co-signed by NYSE Group's Marshall N. Carter, Chairman of the
Board of Directors, and John A. Thain, Chief Executive Officer.
In its proposal to Jan-Michiel Hessels, Chairman of the
Supervisory Board of Euronext, and Jean-Francois Theodore, Chief
Executive Officer and Chairman of the Managing Board of Euronext, NYSE
Group states: "Combining our two companies will be a significant and
historic step that will benefit global securities markets and all of
our stakeholders, including shareholders, customers, employees,
issuers, and the investing public in the United States, Europe and
across the globe."
The advantages of a combined NYSE Group-Euronext include:
-- A strategic partnership that creates the world's largest and
most liquid global securities marketplace with a combined
market capitalization of $21 billion (EUR 16 billion);
-- A market leadership position in a diverse set of large and
growing businesses, including cash equities, listings, equity
options and futures, bonds and market data;
-- The world's premier listing venue, with a total global market
capitalization of listed companies at $27 trillion (EUR 21
trillion), nearly three times that of the next largest
marketplace and more than that of the next four exchanges
combined;
-- Significant cost and revenue synergies totaling $375 million
(EUR 293 million), creating considerable earnings per share
accretion, and substantial value creation for the respective
shareholders of NYSE Group and Euronext;
-- An experienced global board and world-class leadership team,
with group headquarters at NYSE Group's current headquarters
and European headquarters at Euronext's headquarters,
reinforcing Euronext's role as the premier financial
marketplace of continental Europe;
-- A shared commitment to cooperative multilateral regulation,
saluting the effectiveness of Euronext's College of Regulator
model to enforce local rules;
-- A common vision of technology strategy and a horizontal
business model; and
-- No competition issues, resulting in expedited closure and
execution by an experienced management team.
Under terms of the proposal, each share of NYSE Group will be
converted into one share of common stock of the combined company,
which will be named "NYSE Euronext." Holders of Euronext ordinary
shares will be offered the right to exchange each of their shares for
0.980 shares of NYSE Euronext stock and EUR 21.32 in cash. The
transaction is based on a fixed ratio of 1.4000 shares of the combined
company for each Euronext ordinary share, with 30% of the aggregate
consideration paid in cash.* The transaction terms also assume
Euronext will pay to its shareholders its ordinary dividend of EUR 1
per share this year and its previously announced extraordinary
dividend of EUR 3 per share.
The board of the combined company will be comprised of 20
directors--11 directors from NYSE Group and nine directors designated
by Euronext. The Chairman will be Mr. Hessels, Euronext's current
Supervisory Board Chairman, and the Deputy Chairman will be Mr.
Carter, NYSE Group's current Chairman. Mr. Thain will be the Chief
Executive Officer of NYSE Euronext and Mr. Theodore will be Deputy
Chief Executive Officer, with direct responsibility for the European
business. The senior management team will be drawn equally from each
of NYSE Group and Euronext, reinforcing the globally-balanced
character of the new company.
The common stock of the combined company will be listed on both
the New York Stock Exchange and Euronext, and traded in the local
currency on each market.
Citigroup Corporate and Investment Banking is acting as financial
advisor to the NYSE Group on this transaction.
Analyst and Press Conference Call--Today, Monday, May 22 at 8:00am
NYSE Group Chief Executive Officer John A. Thain will host a
conference call today, Monday, May 22 at 8:00 a.m. (EST). A live audio
webcast of the conference call will be available on the Investor
Relations section of the company's website, http://www.nyse.com/. A
presentation that will be referenced during the call will also be
posted to the website shortly before the call begins. Those wishing to
listen to the live conference via telephone should dial-in at least 10
minutes before the call begins.
-0-
*T
Live Dial-in Information:
United States: (866) 202-1971
International: (617) 213-8842
Passcode: 17609066
*T
Audio replays of the conference will be available approximately
one hour after the call on the Investor Relations section of the
company's website, http://www.nyse.com/ and by dial-in beginning
approximately two hours following the conclusion of the live call.
-0-
*T
Replay Dial-in Information:
United States: (888) 286-8010
International: (617) 801-6888
Passcode: 24534134
available 5/22-5/29
*T
NYSE Group, Inc. Proposal Letter to Euronext N.V.
(Letter attachment)
About NYSE Group, Inc.
NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the
New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as
the Archipelago Exchange, or ArcaEx(R), and the Pacific Exchange).
NYSE Group is a leading provider of securities listing, trading and
market data products and services. The NYSE is the world's largest and
most liquid cash equities exchange. The NYSE provides a reliable,
orderly, liquid and efficient marketplace where investors buy and sell
listed companies' common stock and other securities. Our listed
operating companies represent a total global market capitalization of
over $22.9 trillion. In the first quarter 2006, on an average trading
day, over 1.7 billion shares, valued at over $65 billion, were traded
on the NYSE.
NYSE Arca operates the first open, all-electronic stock exchange
in the United States and has a leading position in trading
exchange-traded funds and exchange-listed securities. NYSE Arca is
also an exchange for trading equity options. NYSE Arca's trading
platform links traders to multiple U.S. market centers and provide
customers with fast electronic execution and open, direct and
anonymous market access.
NYSE Regulation, an independent not-for-profit subsidiary,
regulates member organizations through the enforcement of marketplace
rules and federal securities laws. NYSE Regulation also ensures that
companies listed on the NYSE and NYSE Arca meet their financial and
corporate governance listing standards.
For more information on NYSE Group, go to: http://www.nyse.com/.
Information contained on our website does not constitute a part of the
prospectus relating to the proposed offering.
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this filing contains forward-looking
statements, which involve a number of risks and uncertainties. NYSE
Group, Inc. ("NYSE Group") cautions readers that any forward-looking
information is not a guarantee of future performance and that actual
results could differ materially from those contained in the
forward-looking information. Such forward-looking statements include,
but are not limited to, statements about the benefits of the business
combination transaction involving NYSE Group and Euronext, including
future financial and operating results, the new company's plans,
objectives, expectations and intentions and other statements that are
not historical facts. Additional risks and factors are identified in
NYSE Group's filings with the U.S. Securities Exchange Commission (the
"SEC"), including its Report on Form 10-K for the fiscal year ending
December 31, 2005 which is available on NYSE Group's website at
http://www.nyse.com and the SEC's website at SEC's Web site at
www.sec.gov. The parties undertake no obligation to publicly update
any forward-looking statement, whether as a result of new information,
future events or otherwise.
Not an Offer
This communication is for information purposes only and does not
constitute an offer to exchange or purchase any Euronext shares. Any
such offer may be made only pursuant to official offer documents
approved by the appropriate regulators.
Additional Information About this Transaction
In connection with the proposed business combination transaction,
NYSE Group expects that a newly formed holding company will file with
the SEC a Registration Statement on Form S-4 that will include a proxy
statement of NYSE Group that also constitutes a prospectus of the
newly formed holding company. NYSE Group will mail the proxy
statement/prospectus to its stockholders and the prospectus will be
mailed to Euronext shareholders.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED BUSINESS COMBINATION
TRANSACTION IF AND WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION.
You may obtain a free copy of the proxy statement/prospectus (if
and when available) and other related documents filed by NYSE Group
and the newly formed holding company with the SEC at the SEC's Web
site at www.sec.gov. The proxy statement/prospectus (if and when it
becomes available) and the other documents may also be obtained for
free by accessing NYSE Group's Web site at http://www.nyse.com.
NYSE Group and its directors and executive officers and other
members of management and employees may be deemed to be participants
in the solicitation of proxies from NYSE Group stockholders in respect
of the proposed business combination transaction. You can find
information about NYSE Group's executive officers and directors in
NYSE Group's definitive proxy statement filed with the SEC on April
11, 2006. You can obtain free copies of these documents and of the
proxy statement prospectus (when it becomes available) from NYSE Group
by contacting its investor relations department.
Additional information regarding the interests of such potential
participants will be included in the proxy statement/prospectus and
the other relevant documents filed with the SEC when they become
available. This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No
offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the U.S. Securities Act of
1933, as amended.
* Based on the closing market price of NYSE Group common stock of
$64.50 on May 19, 2006.
-0-
*T
Mr. Jan-Michiel Hessels
Chairman, Supervisory Board
Euronext N.V.
Beursplein 5
1012 JW Amsterdam
The Netherlands
Mr. Jean-Francois Theodore
Chief Executive Officer
and Chairman of the Managing Board
Euronext N.V.
Euronext Paris
39 rue Cambon
F 75039 Paris Cedex 01
France
Dear Jan-Michiel and Jean-Francois:
We are excited about our discussions with you on the potential
business combination of NYSE Group, Inc. and Euronext N.V. From our
discussions, it is clear that our companies share a mutual vision for
creating the first truly global marketplace with the world's largest
pool of liquidity. This is a transformative and compelling
opportunity. Combining our two companies will be a significant and
historic step that will benefit global securities markets and all of
our stakeholders, including shareholders, customers, employees,
issuers and the investing public in the United States, Europe and
across the globe.
Shared Global Vision and Growth Strategy
A combined NYSE-Euronext will create the largest securities
marketplace in the world, comprising seven exchanges in six countries.
Our global reach and multi-product offerings will enable the company
to create new listing, trading and market-data opportunities. The
company will also be well positioned to leverage both the NYSE and
Euronext brands, including LIFFE, to expand and broaden existing
businesses into areas of future growth.
The company will deliver superior customer choice, ultimately
empowering investors to move assets seamlessly across continents and
time zones. Our markets will cover more time zones than any other
exchange group, in two of the world's main currencies, and will serve
the largest investor base in equities, bonds and derivatives,
including futures and options. Our seven securities marketplaces will
leverage the best of our collective technology to provide fast,
efficient and innovative tools for investors. We are committed to the
horizontal business model that we both operate.
The company will offer the world's largest listing venue, with a total
global market capitalization of our collective listed companies of $27
trillion (EUR 21 trillion), nearly three times the size of the next
largest marketplace and more than the next four largest marketplaces
combined. The vast pool of liquidity that the combination will create
will prove beneficial and attractive to investors and issuers around
the world.
Financial Benefits
We believe that our partnership will also provide substantial benefits
to our respective shareholders in the form of a broad, balanced and
growing mix of revenues. Our due-diligence efforts have identified
significant cost and revenue synergies estimated at $375 million (EUR
293 million). Consequently, we are highly confident that this
transaction will create considerable earnings-per-share accretion, and
significant value for our respective shareholders. Our combined
company will also generate substantial cash, which obviously will
benefit our shareholders, but also our users, through continued
investment in technology that will reduce costs and risk.
Terms of the Business Combination
At your request, we are pleased to provide this letter that outlines
the terms of the business combination transaction that we have
discussed with you and that our Board of Directors has approved. Under
the transaction, there will be a new Delaware holding company named
"NYSE Euronext."
In the transaction, Euronext shareholders will be offered the right to
exchange each Euronext ordinary share for EUR 21.32 in cash and 0.980
of a share of NYSE Euronext common stock, and each share of
outstanding NYSE Group common stock will be converted into one share
of NYSE Euronext common stock. This consideration is equivalent to an
exchange ratio of 1.4000 shares of NYSE Euronext common stock for each
Euronext ordinary share, with 30% of the aggregate consideration paid
in cash based on the closing price of NYSE Group common stock of
$64.50 on May 19, 2006. The exchange offer will contain a
mix-and-match election to permit Euronext shareholders to elect more
cash or more stock to the extent that either is available. The cash
election and stock election will be subject to proration to ensure
that the aggregate amount of cash and aggregate number of shares of
NYSE Euronext common stock issued in the exchange offer are the same
that would have been issued if all tendering shareholders received the
standard offer consideration. The terms of our transaction also assume
that Euronext will pay to its shareholders its ordinary dividend of
EUR 1 per share this year, as well as its previously announced
extraordinary dividend of EUR 3 per share.
As a result of the transaction, NYSE Group and Euronext equityholders
will become owners of NYSE Euronext, which will hold the businesses of
NYSE Group and Euronext. NYSE Euronext common stock will be listed on
both the New York Stock Exchange and Euronext, and will trade in the
local currency of each market.
Leadership and Governance
We share the belief that the first global exchange must be led by a
global board of directors and management team. Accordingly the Board
of Directors of NYSE Euronext will consist of 20 directors. Two of the
directors will be the Chairman of the Supervisory Board of Euronext,
Jan-Michiel Hessels, who will be the Chairman of the Board of
Directors of NYSE Euronext; and the Chairman of the Board of Directors
of NYSE Group, Marshall N. Carter, who will be the Deputy Chairman of
the Board of Directors of NYSE Euronext. Two additional directors will
be the Chief Executive Officer of NYSE Group, John A. Thain, who will
be the Chief Executive Officer of NYSE Euronext; and the Chief
Executive Officer of Euronext, Jean-Francois Theodore, who will be the
Deputy Chief Executive Officer of NYSE Euronext and will have direct
responsibility for the European business. An additional nine directors
of NYSE Euronext will be drawn from the NYSE Group Board of Directors,
and the remaining seven directors will be designated by Euronext's
Supervisory Board. The day-to-day operations of NYSE Euronext and its
subsidiaries will be managed by a Management Committee, which will
consist of an equal number of designees from NYSE Group and Euronext.
The international character of the Board of Directors should not be
fleeting, and therefore the combined company's bylaws will contain
appropriate provisions to ensure this composition going forward. This
joint American-European governance structure is not just about
geographic diversity - but also about leveraging the excellence
brought to this combination from both management teams.
Our combination will create a truly global securities exchange. The
executive offices of NYSE Euronext will be NYSE Group's current
headquarters and the headquarters for the European businesses of NYSE
Euronext will be Euronext's current headquarters. Indeed, our
transaction will solidify the standing of Euronext as the premier
financial marketplace of continental Europe.
Regulatory Framework
We embrace the importance of cooperative multilateral regulation and
admire the effectiveness of the regulatory entities comprising the
College of Regulators governing Euronext's local marketplaces. We
believe that direct consultation between these regulators and the U.S.
Securities and Exchange Commission will result in an effective working
relationship among the combined company's regulators. Investors and
issuers will be assured that each of the combined company's markets is
regulated in accordance with applicable local requirements.
Prompt Closing and Integration
This letter confirms the terms of the business combination transaction
that we have been discussing with you; it is not intended to and does
not create any legal obligation, which will only be created if and
when our companies execute a definitive agreement. We look forward to
doing so as soon as possible. Given the complementary nature of our
businesses and the lack of business overlap, we do not expect
competition issues, and we are fully confident in our ability to
execute this transaction quickly. Euronext's experience joining
together four stock markets and a leading derivatives exchange, along
with NYSE Group's recent transformative transaction experience,
demonstrate that both our companies can complete challenging
transactions and successfully integrate exchange businesses to deliver
the expected synergies. Together, let us seize this opportunity to
create the world's premier financial marketplace.
We are committed to moving forward with the transaction described in
this letter and to achieving a business combination that will create
the world's first truly global marketplace.
Yours sincerely,
Marshall N. Carter John A. Thain
Chairman of the Board of Directors Chief Executive Officer
*T
