dow wall street equities nyseDON EMMERT
NYSE Euronext and Deutsche Borse have sweetened their offer to shareholders with a €620-million ($910-million U.S.) special dividend as they seek to win approval next month for their planned merger.
The dividend is meant to highlight the financial flexibility of what will be the largest exchange group, as well as sew up investor support, especially in Germany.
"The superior cash flow generation of the combined group allows us to maintain a strong balance sheet, with the ability to pay robust dividends, repurchase shares and invest in new growth opportunities in the future," said Duncan Niederauer, chief executive of NYSE.
The two companies announced their deal in February and hope to win investor approval in July.
NYSE needs majority support in a vote, set for July 7, while 75 per cent of Deutsche Borse shareholders must agree to tender their shares by mid-month.
The deal will not officially close until regulators have signed off, which is not expected until next year.
Shareholder approval has appeared likely since Nasdaq OMX and IntercontinentalExchange withdrew a competing bid for NYSE.
But groups representing Deutsche Borse's staff have urged rejection, citing potential job losses.
The one-time payment will not be made until the deal closes.
Deutsche Borse shareholders will receive €2 a share; shareholders in NYSE, which has a smaller market value than Deutsche Borse, will receive €0.93, or $1.37.
The total pay-out will be €620-million, or $905-million (U.S.).
Separately, Deutsche Borse announced that it would buy out Switzerland's SIX Group in their Eurex derivatives joint venture for €590-million in cash and shares.
Under the complex organization, the two markets own Eurex jointly, but the Swiss receive only 15 per cent of the profits, reflecting the greater business brought by the German partner.
The Eurex deal leaves questions over Scoach, the jointly owned structured products market, and Stoxx, the jointly owned indices business.
"Other co-operation arrangements between SIX Group and Deutsche Borse are unaffected by the sale of the Eurex holding," SIX said.
The developments came as Jeff Sprecher, ICE chief executive, said he was "still interested" in acquiring Liffe, the futures exchange owned by NYSE Euronext.
"Things aren't over yet. We'd love to have an opportunity to work with them," he told the IDX derivatives conference in London.