The future of NYSE Euronext


At NYSE Euronext, the question is: What now?

It invested so much--some might say it bet the farm--on inking a deal with Deutsche Bourse, that it must now fight the perception that it is merely listing. To be sure, the top executives always knew the fight would be difficult, but deep down they were pretty confident they could make it work. They couldn’t. And CEO Duncan Niederauer now has plenty to prove. Most think he will pursue some sort of deal, albeit on a less grand scale.

Bloomberg puts it this way: “Losing the Deutsche Boerse deal leaves Niederauer, a former executive at Goldman Sachs Group Inc., with one fewer option for closing the gap with CME and BM&FBovespa, companies with stock valuations as much as 86 percent higher because of the profitability of trading and clearing derivatives.”

Niederauer himself has mentioned the LME and LCH.Clearnet as companies he would consider. The key now will be to somehow jump aggressively into the post-trade arena, which would appear to be the glaring hole in the product portfolio. We’ll likely hear more analysts weigh in.

RBC Capital Markets, ahead of the deal break-up, trimmed its 2012 earnings estimate by nearly 5 percent. It remains to be seen if any shareholder advocates will agitate for management changes as a result of the failed bid to merge with Deutsche Bourse.

For more:
- here’s the Bloomberg article

Related articles:
NSYE Euronext to call off Deutsche Bourse merger
EU holds fate of NYSE Euronext-Deutsche Bourse deal