Deutcshe Boerse deals to acquire options exchange
Published: Tuesday, May 1, 2007 at 6:01 a.m.
Last Modified: Monday, April 30, 2007 at 10:49 p.m.
NEW YORK - With stock options trading now one of the world's fastest growing markets, Deutsche Boerse AG's pact to buy International Securities Exchange Holdings Inc. for $2.8 billion could lead to more deals - and perhaps a rival bid for the second-largest U.S. options exchange.
The German stock exchange on Monday announced the $2.8 billion acquisition of New York-based ISE, a deal that will create the world's top options market, rivaling U.S. players like the Chicago Board Options Exchange and Chicago Mercantile Exchange.
With ISE investors getting an almost 50 percent premium for their shares, the offer was viewed on Wall Street as being one of the most aggressive made during a period of growing consolidation among global exchanges. It also ups the ante for NYSE Euronext Inc. and Nasdaq Stock Market Inc., both keen on expanding.
"It was somewhat out of character for Deutsche Boerse to be so aggressive, but it shows how important this is for them,'' said Richard Herr, an analyst with Keefe, Bruyette & Woods. "But, I can't totally rule out a competing bid.''
Deutsche Boerse Chief Executive Reto Francioni has been under pressure to strike an international acquisition after his company's efforts to buy stock exchange operator Euronext were foiled by the New York Stock Exchange.
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