Reuters: Regulatory News: UPDATE 2-NYSE, IntercontinentalExchange in merger talks -WSJ

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UPDATE 2-NYSE, IntercontinentalExchange in merger talks -WSJ Dec 20th 2012, 01:05 Wed Dec 19, 2012 8:05pm EST Dec 19 (Reuters) - IntercontinentalExchange Inc and NYSE Euronext are in talks about a possible merger, which may be structured as a takeover of NYSE, the Wall Street Journal reported on Wednesday. The report comes more than a year after ICE had jointly bid with Nasdaq OMX Group Inc to purchase NYSE for about $11 billion, then break it up into parts that each of them would acquire. That bid competed with a plan by German exchange operator Deutsche Boerse AG to acquire NYSE in a $9.3 billion all-stock deal. But neither proposed deal was successful, and questions have lingered about NYSE's future as the U.S. exchange seeks to increase its exposure to derivatives and commodities trading, as well as trading abroad. Shares of NYSE jumped 12 percent in after-hours trading to $26.96; ICE shares rose 3.1 percent to $132.32. At the close of trading on Wednesday, NYSE was worth about $5.8 billion. Spokespeople for NYSE and ICE declined to comment on the report. NYSE's biggest revenue source is U.S. stock trading, where margins have been under pressure for years. Its plan to combine with Deutsche Boerse, which has a strong derivatives trading business, was blocked by a European regulator due to anti-trust concerns. ICE and Nasdaq withdrew their joint bid in May 2011, citing opposition from U.S. anti-trust regulators. ICE's reported plan to buy NYSE on its own may not face the same challenge. NYSE, which operates the New York Stock Exchange, reported $2.8 billion in revenue for the first nine months of 2012, down 19 percent from the same period in 2011, due largely to weaker trading volumes. Stock trading accounted for half of NYSE's year-to-date revenue, with derivatives contributing 30 percent and technology services contributing the remaining 20 percent. Link this Share this Digg this Email Reprints

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