Deutsche Boerse and NYSE offer special dividend
Stock exchange merger partners Deutsche Boerse and NYSE Euronext unveiled a special dividend yesterday to woo shareholders a month before they must vote on combining the two markets.
The exchanges offered shareholders of the combined company a one-off dividend of €2 (£1.78) after the deal closes – a total payout of €620m.
The sweetener is the latest move to win shareholder support for the exchanges’ $10bn bid to create the world’s biggest exchange operator, following criticism of the deal by the previous counterbidders Nasdaq OMX and IntercontinentalExchange.
Nasdaq-ICE dropped their competing offer for the New York Stock Exchange last month, leaving Deutsche Boerse in pole position, but the merger must first pass European anti-trust regulators.
“The ability to provide a special dividend underscores the strength of the combined group,” said NYSE Euronext head Duncan Niederauer.
Niederauer, who is head of NYSE Euronext, will become chief executive of the combined group, while Deutsche Boerse Chief Executive Reto Francioni will assume the role of chairman.
Earlier this year Francioni had brushed aside suggestions the company was poised to sweeten its offer.
“We have a signed merger agreement … which was fully negotiated over a long period of time,” Francioni told analysts at the time. “We stand by the terms of the agreement and we are working towards a timely closing.”
Yet the $11.3bn rival bid from Nasdaq and ICE – withdrawn after the US Justice Department refused it on anti-competitive grounds – may have influenced the dividend decision.
“I’m not sure whether that dividend was necessary to get the shareholder approval at this stage of the game because you didn’t have a competing bid, and I think the risk is more on the competition (antitrust) side,” said Chris Allen, exchanges analyst at Evercore Partners.