Filed by NYSE Group, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant
to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Companies:
NYSE Group, Inc.
(Commission File No. 001-32829)
Euronext N.V.
Date: June 5, 2006
On June 2, 2006, NYSE Group, Inc. and Euronext N.V. held a joint
investor conference to discuss a proposed combination agreement between the two
companies. The following is a transcript of this conference:
* * *
Principals:
Jan Michiel Hessels, Chairman of the Supervisory Board, Euronext N.V.
Marshall N. Carter, Chairman, NYSE Group, Inc.
Jean-Francois Theodore, CEO of Euronext N.V.
John A. Thain , Chief Executive Officer, NYSE Group, Inc.
* * *
INTRODUCTION, ANTOINETTE DARBY, MEDIA RELATIONS DIRECTOR, EURONEXT (MODERATOR)
Well, then let us start now. Good afternoon, and also good morning,
ladies and gentlemen. We are extremely pleased to have you here with us for this
historical event. I will be your moderator today. For your information, I wanted
to give you a bit of background.
This presentation today is webcast. Therefore, we will also take
questions coming in by phone. Please therefore also stand up and introduce
yourself clearly, so that everybody knows who you are. And I would also ask you
to give everybody a chance to ask their questions, and therefore limit your
questions, at least at the initial stage, to a number of two. Last but not
least, could I please ask you to switch off your mobile phones.
Now Mr. Jan Michiel Hessels, Chairman of the Supervisory Board of
Euronext, and Marshall Carter, the Chairman of the NYSE Group, will introduce to
you this transformational transaction. The detailed presentation will then be
held by Jean-Francois Theodore, Chief Executive Officer of Euronext, and by Mr.
John Thain, Chief Executive Officer of the New York Stock Exchange. I now hand
over the floor to Mr. Hessels.
(Mr. Hessels) Thank you. Ladies and gentlemen, thank you very much for
attending this meeting. And that, of course, also goes for everybody who's
watching the webcast or who's dialing in to this meeting. Jean-Francois Theodore
and myself are very pleased that you could join us here today in Paris. And that
we are joined, of course, by Marsh Carter and John Thain from the NYSE. Before I
pass the floor to them, allow me to make a few remarks. Last week at the
Euronext AGM, we told our shareholders that we strongly believed in the
consolidation of the exchange industry. Two proposals were then on the table,
and we said that our initial view, our first initial view was that the
transaction with NYSE was by far the better one.
During the last week or so, our respective teams have been working very
hard to refine and to improve the terms of the deal. Yesterday, the Euronext
Board concluded that the proposed merger of equals with NYSE is the most
attractive consolidation opportunity, that we should enter into an agreement to
pursue this, and also that we should do it now. Therefore, the combination
agreement was signed last night. This Trans-Atlantic partnership with be a
merger of equals with fully balanced governance structure, also protected in the
future ... not just for now, but also in the future ... to ensure the
continuation of the important and unique characteristics that each partner
brings to this deal.
We believe that this combination alone brings the opportunity for
global leadership while allowing the unique federal model the Euronext practices
successfully will not only remain, but also can be built upon, as the
cornerstone for a stronger European capital market. May I now invite Marsh
Carter to say a few words. And, of course, Marsh, I'm looking very much forward
to working with you in the future.
(Marshall N. Carter): Thank you, Jan Michiel. I'm honored to stand with
you, Jean Francois and John Thain, on this wonderful day that marks the birth of
our new company, the combination of the New York Stock Exchange and the
Euronext. Over the past year, it became clear to me, John Thain and our Board of
Directors that the idea part of the New York Stock Exchange would be Euronext,
because Euronext shares our strategic vision that to become a true global
competitor will require further market consolidation, greater diversity of
product offerings, and a much better ability to reach investors and issuers
around the world. Euronext has an outstanding record of the market innovator,
integrator and creator of shareholder value.
Euronext and the New York Stock Exchange will together create the
global financial marketplace of the future. Jean-Francois, John Thain, I look
forward to our partnership. Jan Michiel, I look forward to serving as your
deputy. Thank you.
(Jean-Francois Theodore): So my name is Jean-Francois Theodore, and I
will be starting the slide show presentation. NYSE/Euronext (is to become) a
global exchange. And while you will be looking at the usual disclaimers that are
always in the presentation, I would like
to tell you how pleased I am to be here in front of you, to make this joint
presentation together with John.
You have been reading about the exchange consolidation for the last two
or three years in the press on a regular basis. Today it happens. Today it is (a
historical day) with the announcement of the first, by all means, global
exchange.
We have signed last evening the combination agreement to merge with the
NYSE Group. Of course, this will be subject to approval from our regulators, the
different supervising authorities, and our shareholders, but it is a foundation
agreement. Let's turn maybe to the next slide ... the one immediately after the
legal disclaimer.
The newly combined group will be a two merger of equals that combines
the two market leaders both sides of the Atlantic. NYSE being the world's
largest and most liquid global equities marketplace is the premier listing
venue. The new and premier global exchange, NYSE name, and Euronext, being the
first truly cash and LIFFE derivatives exchange. So the largest cash equity
exchange in Europe, based on, instead of the state of the art technology,
they're having an exceptional success with the integration.
In between these two leaders, there is balanced shareholder of
contribution and balanced governance, too. With this merger of equals, we will
be the first to create a transAtlantic exchange. I will just mention a few
highlights. We will be the world's largest exchange by market cap, approaching
at least 16 billion Euros, 20 billion dollars. We will manage the world's
largest liquidity pool, with approximately 78 billion Euros of averaged daily
turnover. We will run exchanges in seven countries, and will be the world's
first list, listing the new, managing 80 of the 100 top companies listed
worldwide. Our revenue will be diversified both in geography and in product
line. And last but not least, we will be certainly the partner of choice for the
consolidation, but of course also ready to compete. The benefits for the
shareholders ... and let us take a look ... are numerous and substantial.
Let's start with our shareholders. The amount of synergies to be
realized in the combination is substantial. Two hundred fourteen million Euros
of cost cutting will be realized
over those three years and 78 million Euros of great new synergies across cash
equities listing on a daily basis activity. All are deliverable.
The new combination is also well positioned for future growth and
profitability. For our employees, our marketplaces are seemingly in place. They
will become part of the new global group with great development opportunities
and challenges, of course. The activity managements for two will be balanced.
The user will be able to cover more time zones within NYSE Euronext than any
other exchange. A reason to be in this model will be the cornerstone of our
combination and will be the level of cost and the risk setting for our
customers. We don't see therefore any competition issue.
For the issuers, they could have easier access to both U.S. and
European investors, and there is more access to new equity. But I mean, there
will remain listed in their country, and jurisdiction of choice, each are always
in control.
There will be no change in the current local regulatory framework. Each
market will stay rooted where they think they have their roots. I will now hand
the floor to John to present you the NYSE Group. And at the beginning we told
John that it would be fun that you would present Euronext and I would present
NYSE. Which is a spirit of fun, but for accuracy sake at least today and then at
the beginning, we decided finally to stick each other to what we know best for
the time being. (LAUGHS). John, that's up to you.
(John Thain): Thank you, Jean-Francois. I agree that we should actually
give each other's presentation at some point. But let me first just add my
comments. This is a very exciting and proud day for me to share this table with
Jan Michiel, with Jean-Francois, and of course with Marsh Carter. This is
definitely a historic day. We are creating the first truly global marketplace.
We're also creating a great transatlantic marketplace. And I think beyond the
cooperation between our two marketplaces, this also can be an opportunity to
further enhance the relationships between the United States and Europe.
We are combining two great companies, and we will be a truly global
competitor. Because I think in today's marketplace, it's not enough to simply be
the leader in the United
States. It's not enough simply to be the champion of Europe. It really is
important to be a global competitor. And that is what we are creating here
today.
Let me start by just giving you a quick overview of what is NYSE Group,
and then we'll move to Euronext, and then we'll get into what the real meat of
the presentation is, which is the combination of the two. Quickly, the NYSE
Group is a 214-year old institution. Earlier this year we became a public
company through the merger with Archipelago. And we are the leader in listing
companies in the United States and across the globe ... 93 percent of the Dow
Jones Industrials, 85 percent of the S&P 500, 85 percent of the Fortune 500 ...
but also, 41 percent of Fortune's 100 Fastest Growing Companies are listed on
the New York Stock Exchange.
Organizationally, NYSE Group is a holding company. Underneath, we have
the marketplaces themselves ... both the New York Stock Exchange market, which
is just a cash equities market, and NYSE Archipelago, which is both a cash
market and an options market.
We trade New York listed stocks on the New York, and on NYSE
Archipelago, we trade New York listed, Amex listed, and over-the-counter stocks
as well as options. SIAC is our technology provider, which we own two-thirds of.
And our regulatory functions are underneath our parent company, inside of a
not-for-profit entity with a totally independent Board of Directors, creating an
SRO, a self-regulatory organizational structure that keeps the regulation
functions close to the marketplaces so they're really very knowledgeable about
how our market works. But independent as they need to be. As a listing venue, we
are by far the largest listing venue in the world. We have the market
capitalization of our publicly traded companies of 22 trillion dollars, we have
the highest listing standards in the world, and we offer access to over 90
million investors. When we look at our position in the marketplace in the U.S.,
all initial offerings that qualify to list on New York, over 90 percent do, in
fact, do so.
In terms of liquidity, we are the largest in terms of liquidity, with
over 86 billion dollars of average daily turnover. And this year we've been
trading about 1.8 billion shares a day. And when you look at the mix of our
revenues, three primary sources of revenues are transaction fees, which goes
across all of the types of transactions ... New York, NASDAQ, AMEX and the
exchange-traded funds, as well as options ... a listing of venue which we talked
about. Market data revenues is a third main source of revenues for us, and then
regulatory fees and data processing fees.
And what you see here is, this is for the first quarter of 2006. And it
really does offer a balanced mix of revenues. But one of the things you'll see
when we get into the discussion of Euronext is we really do not have a
derivatives business, and the combination of the strength of both of our cash
businesses and our derivative businesses is the one of the big sources of
strength.
This just gives you our first quarter results. The reason we use our
first quarter is because the combination of NYSE, Archipelago and the options
business really didn't exist before, so this is the first time you are able to
look at the combined companies on a pro forma basis. This assumes that all of
the companies existed together for both periods of time, so it's a true
comparable number.
And what you see here, which is important, is a very significant
growth, both on revenues in terms of pre-tax profits ... pre-tax profits were
actually up 49 percent quarter over quarter ... and very significant margin
improvement, up to 21.8 percent for the first quarter. Which is some of the,
both synergies between NYSE and Archipelago and then some of the expense savings
that we talked about when we made that acquisition.
Lastly on the NYSE side, we are in our core businesses very well
positioned for growth. Our cash equities business has been growing, both in
terms of overall volume, and in terms of market share, particularly in the
over-the-counter space and in the exchange traded funds space. Exchange traded
funds are very rapidly growing products where we have a high market share.
Options is also rapidly growing in the U.S., and we have about a ten
percent market share, but a lot of growth opportunities. The fixed income area
is an area where we also see growth in the U.S. and also see great synergies
between Euronext's fixed income businesses here.
And then trading licenses is a new source of revenue for us, because
when the Exchange became a public company, we now license off the right to be on
the floor of the
Exchange. And on a pro forma basis, for instance they would annualize for this
year. That would have generated $63 million of incremental revenues.
The listings business is very, very strong, and we now have a new
listings platform, NYSE Archipelago for those smaller companies that are growing
quickly but that don't currently qualify to list under the New York Stock
Exchange. And we also have very interesting opportunities to grow on the market
data side, particularly on the proprietary side, which are not regulated by the
SEC. With that as a quick overview, I'll turn it back to Jean Francois to talk
about Euronext.
(Jean-Francois Theodore): Thank you, John. Let's speak now about
Euronext. You have on the first slide, the presentation of the story in the form
of an arrow. It's naturally a presentation gimmick. It is a relatively young and
fast-moving, really European company. Merger in September 27, IPO in July 01.
Combination with LIFFE and Portuguese joining end of 01, early 02. And
completion of our single trading platforms end of '04. Our philosophy has been
to have the best of everything. On the legal side, giving your customers,
issuers and the investors the capacity to stay rooted in their own land and
domestic low, while on the technology side, unifying systems to realized
economies of scale and a very huge liquidity pool. Maybe we can have a look at
what we did on systems.
When we started this venture in 2000, we had ten different trading
systems for cash and derivatives market in five different countries. In only
four years we achieved success with this migration and solitary position of this
values market and two unified trading systems, LIFFE connect for derivatives and
MSC for cash, which are recognized as the best technology available in the
market. At the same time, we succeeded in managing the restoration of our
business, a process in which to date these businesses are fully managed by
independent partners. The migrations into single trading system combined with
the optimization of IT organization, which led to a partnership with AEMS.
Inside Euronext market solution enable us to reduce strongly the running and
development cost of our markets.
Let's go to the next slide to look at how we are organized. Though
having a federal philosophy and a distributive organization in between market
centers split over the various
Euronext countries, we are nevertheless a unified company organizing and
managing responsible business unit. On this slide, on the bottom left or right,
depending on where you are seated, on the slide you can see our new acquisition
MTS marking or coming back in the bond market in a joint 51-49 venture with
Bourse Italiana.
Moving to our primary cash market activity, you can see that Euronext
lists 30 of the top 100 European companies by market cap. 2005 was, again, a
good year in terms of number five IPO's in our markets. Next is European leader
with at total of 78 IPO's, among which the jumbo IPO of EDF France, the world's
biggest IPO in 2005. According to independent analysis, Euronext has been number
one in IPO's in EU regulated markets to raise capital. Sixty billion Euros of
new capital was raised during the year. New listings other than additional 100
05 billion Euros of market cap. And that's the end of 05.
Market cap of Euronext at end 2,295 billion Euros. We have seen steady
increase in cash trading volumes starting to rise for 2005 with volume of 15
percent of other years. But flat the first half and with a trend of 30 percent
in the second part of the year. This positive trend has accelerated since the
beginning of 2006 with volumes of 52 percent year-to-date in cash. Euronext is
the biggest European exchange by far, biggest in terms of average daily
transactions or in terms of average turnover.
In May you may have seen our press release of yesterday. Volumes are up
90 percent compared to a year ago.
Concerning now our derivative business, we have to complete the
migration of our five derivatives market to a single trading system. This
enabled us to decrease significantly our cost base by 15 percent. At the same
time we improved the response times of the functionalities and haul out new
product offerings, strengthening Euronext's LIFFE competitive position, we could
be on the regulated market with life connect new releases, or tapping into the
OTC market with our new ABC offer.
The start into the year 2006 was still a little bit slow in derivatives
but has accelerated since with new volatility, and volumes are up 31 percent
year-to-date. We are in the lucky position to have a very well balanced business
mix. For Q1-06, derivatives of news are
still ... that's a difference with NYSE our first source of revenue with 36
percent. Our cash, primary and secondary activity combined listing included,
has had a strong catching up with 30 percent of share is strong progress
compared to a year ago and including for the first time some revenues coming
from the bond market and coming from SDS. So, it's cash trading 27 percent,
listings 3 percent, that's how we come to the 30 percent.
Since the creation of Euronext, we have strongly improved the group
profitability up from 12 percent revenue margin in 2001 to 33 percent in 2005,
and standing up at 41 percent for the first quarter of 2006. We realized last
year revenue of 318 million Euros, a first quarter revenue is 109 million Euros
only for the quarter. This was realized through the successful integration of
our ten different markets.
Let's go now, maybe, to the new company we are presenting to you today.
This new world leader, a global exchange, and the first one: NYSE Euronext. As
we have both said before, we will be creating the first multi-product global
exchange group. Global in cash equities, global in branding, allowing for
multiple listing offerings, extended trading hours, and a common IT platform.
Global also in derivatives with LIFFE and NYSE Arca business, business has been
combined. The aggregate market cap of the new group will be greater than that of
the next four exchanges combined, making up clearly the world's largest cash
equities marketplace.
The new combination will list 80 of the top 100 world public companies.
And we will be, by far, the world's largest cash equity trading venue with an
average daily trading value of 100 billion dollars. We will be able to offer the
boldest product crunch in cash trading. Derivatives with a new range of products
will be delivered. Listings with new international listing in Euro. This
transaction is also a victory for VIO, and in trading software on the one end.
AEMS and SIAC. We have tools on which to work. The revenue base of NYSE Euronext
will be robust and very diversified. If we look at the Q1profit, one-third comes
from cash trading. Almost 20 percent from derivatives. Market data, listings and
sales of software, each being equal after 13 percent. Revenues for the first
quarter are totaling 602 million Euros, or $773 million.
Finally, from my side before ending back to mike on the floor to John,
I would like to point out ... one very important point. It's that the regulatory
framework. We need a change in
the new combination, because the new company will be holding without an exchange
statute governing to holdings themselves, NYSE Group and Euronext. And the
exchanges, strictly speaking, are only at the sub layer, keeping the existing
regulatory framework. So, SEC on the U.S. side. On the European side, Euronext
NV remain as it is, which is chairmen committee of regulators for five
countries. On this side, no Sar-Box at all in Europe. The new company will have
a dual primary listing on NYSE in dollars, and on Euronext in Euro. So, as you
can see, there is absolutely no position in between this concept of the deal and
the building of the European Exchange. On the contrary, it will be an extension
of Euronext proven and efficient federal model and experience, thus providing
flexibility to accept new European business.
(John Thain): The last part of the presentation covers the value
creation of this transaction and how that value creation is shared between both
sets of shareholders. And I would say that the most important word, both in
terms of the sharing of the value creation, as well as the governance and
management structure is balance. We have gone to great lengths to make sure that
the very large value creation that we're creating through this transaction is
shared equally between the sets of shareholders, and that we have a well
balanced both governance structure and management structure going forward.
So, the first five gives you the structure of the transaction itself,
where each Euronext share will be exchanged for 2132 Euros in cash and 0.98 of a
share of the new NYSE/Euronext holding company. Now, the important component of
this is that Euronext shareholders will have the option to choose to take up to
all cash, or up to all stock, depending upon the proration that results, so that
there will be the capability for those shareholders who prefer cash, or those
shareholders who prefer stock, to make such an election. The three Euro per
share special distribution will be in addition to that 2132 of cash. Each NYSE
Group shareholder will exchange each of their shares for a share of the new
NYSE/Euronext parent company.
The exchange offers anticipated to take place within the next six
months, there are a number of conditions, including regulatory approval on both
sets of the regulators as well as both NYSE Group shareholder approval and
Euronext shareholder approval. The minimum condition
on the exchange offer on the Euronext side is 66 and two-thirds, although that
may be lowered to 50.1 percent.
I'm now going to go into the synergies, and I think it's very important
here that we spend a bit of time, because our collective teams have spent the
last few weeks getting into a detailed discussion, making sure that these
synergies are both conservative and deliverable. And, so, the first slide shows
you the expense synergies. And here the total expense synergies we're talking
about, which will come over a three-year period, is $275 million or 214 million
Euros, the vast majority of which is coming through the technology side. And I'm
going to spend some time going through that. We also believe that there are some
restructuring costs, which are denominated on the bottom that will cost to get
to these synergies.
Let me go to the next slide and give you the details on the technology
side, because that's the bulk of the expense synergies. Between the two of us,
we currently operate six different trading platforms. And, ultimately, we're
going to move those six different trading platforms to two. So, we're going to
consolidate what are now three cash platforms between the two of us into one.
And we're going to consolidate three derivative platforms into one. So, we'll
have one global cash platform and one global derivative platform. That is a very
significant opportunity for us to reduce technology costs.
We also today, between the two of us, operate ten data centers. We
believe we can move to four. Very dramatic cost savings. And, finally, we,
today, operate four different networks where we send messages between on our
different systems. We believe we can ultimately bring that four networks down to
one single global network. So, that consolidation and that concept really drives
that $250 million of expense savings. Now, let me show you what that looks like
over a period of years. And this slide is intended to break out for you over the
course of the next three-plus years how we get to these expense savings and how
they add to the expense savings that NYSE Arca was already going to accomplish
and what Euronext was already going to accomplish. So, if you look at where we
are today, between the two of us we spend $686 million on technology. And where
we're going to end up in 2009 is we're going to spend $304 million on
technology. That's a $382 million savings over that period of time. That
comes in three pieces of savings and one incremental cost. First, there's $120
million of savings that come from NYSE/Arca itself. Those are part of the $200
million we talked about when we first created NYSE/Arca. We are well on our way
towards achieving those. And you can see those separated out on the slide.
There is an incremental $250 million of savings that comes from this
transaction. And it comes from the consolidation that I just talked about in
terms of the trading platforms, the data centers, and the communication
networks. There's also another $26 million of technology savings that Euronext
already had built in to its business going forward, really resulting from the
aims contract, the aims joint venture contract. And so that is also separately
denominated here. And the last piece, which is a small piece, is there is an
inflation factor, which works the other direction, which is why if you added up
all the numbers, you'd actually see it's slightly less than the total added
synergies, because we do assume that there will be an inflation factor into
technology costs of about $14 million.
You can see these get phased in over time. It comes from exactly what
we were talking about, which is consolidating the platforms, consolidating the
data centers, consolidating the networks. And these numbers have been very
thoroughly scrubbed by our two technology teams over the last couple of weeks,
and we're very confident that we can deliver these numbers.
On the revenue side, there are also significant revenue opportunities
and revenue synergies. First, we believe that the ability to cross sell
derivatives, and derivatives is a business that's growing very, very quickly. We
on the NYSE Group side have a relatively small derivative business. We think
there are great opportunities to cross sell across our different customer bases.
We also think there's great opportunities on the cash trading side. The ability
to trade across a much wider set of time zones, the ability to offer the shares
of some of our very large listed companies, between our two different customer
bases we think also offer great opportunities. And then, third on the listing
side itself. You know, NYSE Group has a great position in the listings business.
We think that NYSE/Euronext will have even a better position to compete,
particularly for those international listings, which are currently not coming
into the U.S. We
believe that our combined listing firepower will be very effective in competing
with the other listing venues around the world for the big global IPOs.
In terms of value creation, this slide is intended to show you how the
value creation is split between our two respective shareholders. So, if you look
at the first line, this shows a pre-transaction, so it's picked at a May 31
date. The value of our two companies, which as you see, are about the same, 7.5
billion Euros in the case of Euronext, 7.3 billion in the case NYSE Group. You
see the next line is the net present value of the synergies. And so that is the
big value creation item. Then we have the cash and the transaction and the
special dividend. And you see how the value creation is allocated between the
two shareholder groups. The Euronext shareholders will have 41 percent of the
resulting shares of the new NYSE/Euronext and the NYSE Group shareholders will
have 59 percent of the shares. That then is added to the cash in the transaction
for the Euronext shareholders as well as the special distribution to give the
value allocation of 9.1 billion Euros, equally split between the two shareholder
groups.
And you see, if you look at the percentage change in shareholder value,
you see very similar, very balanced allocation between the two shareholder
groups of that significant value creation. We also have a very balanced
governance structure. And I'm just going to go through this briefly. You can
obviously read it from the slide. You see the board itself. We have a balance
between the chairman and deputy chairman of the board, the CEO responsibilities,
and the board of directors, which initially will be, besides the two chairmen,
the chairman and deputy chairman, and CEO and the deputy CEO, will have seven
additional from Euronext and nine additional initially from the NYSE side. And
the governance structure as well as certain strategic decisions requires super
majority votes to impact. And so, I think the balance in the board structure is
reflective of our view of the balance here between our two entities.
We also have a very balanced management team. So, our management
committees will have equal representation from both sides. I will be the CEO,
Jean Francois will be the deputy CEO. And Jean Francois will continue to run all
of the international operations. The new holding company will be a U.S.
domicile. So, our U.S. headquarters will be in New York. And the international
headquarters will really continue to be the locations of Euronext today. So, we
are not disturbing any of the strengths that Euronext has in its different
markets, both in Europe and, of course, in London in the case of derivatives.
And branding-wise, I think we have by far the world's best brands. Between NYSE
and NYSE/Arca, Euronext/Euronext LIFFE and, more recently, MTS, there is really
no competitor in the world who has that strength of brand.
Finally, in conclusion, and then we'll open up to questions. We do
believe this creates the first truly global exchange. It creates a global entity
that really has no one in the world that competes with in the exchange business.
This is a platform for great growth opportunities, both in the U.S. and in
Europe. There is very significant value creation here for both sets of
shareholders. And it's shared equally between those shareholders. We have a
balance governance structure, we have balanced leadership, and we have a team
that works well together. We've spent a lot of time together over the last few
weeks. And actually both sets of management teams are here in Paris today. We
are committed to multilateral regulation. Jean Francois talked about that. The
continued emphasis on local regulation of the local markets. And I and others
have spoken to the regulators here as well as in the U.S. with the SEC. And
we're very confident that the regulators can work together. Finally, this is a
transaction that can be closed quickly. There are very little, if any, antitrust
issues. And this is something that the management teams are committed not only
to getting closed, but to working together and make very successful for all of
the stakeholders far into the future. Thank you.
(Moderator): Thank you so much, John. Thank you, Jean Francois. We're
now ready for your questions.
(Operator): Ladies and gentlemen, if you wish to ask a question, please
press Zero-One on your telephone pad.
(Caller): I'm from Reuters. First thing, congratulations on your
agreement. I just wanted to know if you had a date yet for the EGM? And I wanted
to know if at this EGM shareholders will be required to agree only the
NYSE/Euronext merger plan, or are they also going to be asked to vote on a
possible merger plan with Deutsche Borse as well. That's my first question,
which leads to a second one. Are you still in touch with Deutsche Borse, or have
you
stopped merger discussions with them? My final question, if I may,
two-and-a-half questions. Is Borse Italiana going to join your alliance between
the NYSE and Euronext? Thank you.
Jean-Francois Theodore: There will be an EGM before the closing of the
deal. We don't know yet exactly. We are looking for legal advice when this EGM
will have to take place. Anyway, it will be before the closing of the deal, so
you will have double security for shoulder. And EGM and the offer process by
itself, the logic of the combination I gave on that was signed today is that we
would submit only this proposal to EGM. You remember that only ten days ago, we
heard EGM's questioned the other side, which was defeated. This agreement is, we
think, currently the best available combination. So, Euronext is creating,
really, a world leader (Inaudible). So, I think I answered the Borse Italiana
question, as you might have seen through the communication made by the chairman
of Borse Italiana attracted by the open model of Euronext. And we are going to
start very soon in surveying the next few days discussion for Borse Italiana not
decided to join Euronext, has decided to look for partnership. And as I said
that the first choice of the first look will be Euronext. We would welcome with
pleasure BI and we think that there is a complementary thing between us and BI,
which is very strong. And that our model with BI, the Milan Stock Exchange,
development of possibilities that they could hope.
(Moderator): The other part of the Deutsche business, the answer is
we're no longer in touch with Deutsche Borse. We're signed now with New York.
We're committed to do this deal, and we take it from there.
Q: I'm Angela of Dow Jones. To rebound the Deutsche Borse, Deutsche
Borse just said that you would continue to look for partnership in combination
with Euronext. Would you be open to discuss if there would be another
combination?
Jan Michiel: I think I'll repeat myself. We have signed with New York.
We are committed to do this deal. To go one step further, because as a board, of
course, we have our fiduciary duties. We're obliged to listen to anything that
make sense or could create value or be in the best interest of our company.
Therefore, I think, it's interesting to know that in the combination agreement,
there is no breakup fee. So, there is no incentive to stay in. We're free
from a monetary point of view to listen to anything that makes sense. But,
again, we have signed, and we're committed.
(Moderator): I think the gentleman in the second row has a question.
(Question): The stock of the New York Stock Exchange is highly valued.
The price earnings ratio is much higher than that of Euronext. So, isn't it
rather risky offer for the Euronext shareholders? And the second question, Mr.
Theodore, a year on French radio, I think you said, "I'm dreaming of creating a
large European stock exchange to rival with the New York Stock Exchange." Why
have you given up that dream?
(Jean-Francois Theodore): I will take this forcefully. We have always a
dream, and we would welcome the Detsche Borse with due value and rank if they
were ready to join an open and federal model as we have been setting up in
Europe. A different Euronext, of course, but this dream is a dream we still
have. And we believe, as I said, that the Trans-Atlantic merger is not at all
contradictory with building the true Pan-Europe exchange.
(John Thain): Let me just talk about the New York Stock Exchange
shares. We just offered $1.7 billion worth of NYSE Group shares, about 28.75
million shares, in a secondary offering to a broad range of institutional
investors. And, so, I think the current valuation is absolutely ratified by the
marketplace and by the institutions who bought those shares in that distribution
which just took place a couple of weeks ago. So, I don't think there's any
question that the shares are properly valued by the institutional community.
(Jan Michiel): May I add one point maybe to the point that Jean
Francois made on Deutsche Borse. Yes, it's true. We have been negotiating a
number of times in good faith with Deutsche Borse in order to get something done
in the European area, which for all sorts of reasons could make sense. We have
found out that this was not possible on the terms that we found, that we
considered in the best interest of the company. And, in fact, in those days, New
York was not out there as a potential partner. I think one of the strengths of
this deal and maybe that cannot be emphasized enough is that the structure, the
proven successful open federal structure of Euronext, which was has worked
really quite well as an understatement over the last four or five years, stayed
in tact-
(Jan Michiel): We consider it in the best interest of the company. And,
in fact, in those days, New York was not around yet as a potential partner. I
think one of the strengths of this deal, and maybe that cannot be emphasized
enough, is that the structure, the proven, successful, open federal structure of
Euronext, which has worked really quite well as an understatement of the last
four or five years, stays intact. And on that basis we can build for the further
consolidation of the European Securities industry. I think that is a very strong
point of this merger, better than becoming a more Frankfurt-centered vertical
exchange, which I believe, we believe, all our colleagues believe, would be much
more difficult structure to get European consolidation done. And I think the
proof of the pudding is Italy very soon.
(Moderator): I would now like to take three questions coming in by
phone, please.
(Operator): We have a question from Mr. Ken Worthington, J. P. Morgan.
Sir, you have the floor.
(Caller): Hi. Thank you very much. Can you just explain how SOX applies
to cross-listed companies?
(Moderator): I'm sorry. I think you will have to dial in again. We
cannot understand you. Next question.
(Jan Michiel): I understood that the question was with Sarbanes-Oxley
being applicable to cross-listed in Europe and the answer is no.
(Moderator): The answer is no, if it is the question.
(Caller): Can you hear me now? How does Sarbanes-Oxley play into the
New York Stock Exchange Euronext ability to cross list companies? And is there
potential to structure listings that overlaps this regulatory burden?
(John Thain): It's John Thain. The structure of the transaction has
been very carefully created to keep the U.S. regulatory environment separate
from the European regulatory environment. So companies listed in the U.S. will,
of course, be subject to Sarbanes-Oxley. Companies listed on Euronext will not.
And there's no crossover between those. If a company
chooses to be listed in both places, then they are choosing to be subject to
both such regulatory regimes. But there is no risk of Euronext-only listed
companies having any subject to Sarbanes-Oxley.
(Caller): Okay, great. Thank you. John, for my second question ... Do
you have to monitor?
(Jan Michiel): Without overlapping, what John said is the development
of international listings in euros for these big companies of the emerging
markets. Not going to New York anymore. But going as the time being to another
city of Europe. Because of Sarbanes-Oxley. And one of the reasons I can say John
told me at the beginning of the attractiveness of Euronext for NYC is that
Euronext is the main stock exchange in the Euro, the second world's largest
currency. So the choice of NYC to partner with Euronext is a victory of the
Euro, so to say, and the prospect of interesting new listings in Euronext
marketplaces.
(Caller): Great. Thank you. For a second question for John Thain, you
have a lot on your plate. Am worried that you and your management team are
overextended. Can you talk about the division of duties and the accountability
you have for your major initiatives?
(John Thain): While it is true that we have a lot on our plate and
we've accomplished a lot in a relatively short period of time. But I also have a
very strong management team. We've had the last, little over a year to integrate
the management teams between the New York Stock Exchange and Archipelago. And
we're also partnering with a very strong management team. And we've bad the
opportunity to really work together over the last really month or so. We've
spent a lot of time sorting out how we're going to achieve these synergies and
talking about our various different business models. And so I'm very confident
that the combined management teams will first work well together, which is
important in any transactions. And second of all have the overall depth and
scope to be able to manage this truly global enterprise.
(Caller): Great. Thank you.
(Operator): There is a question from Mr. Richard Repetto, Sandler
O'Neill. Go ahead, sir.
(Caller): Yes. John and Jean-Francois. First question, the expectation
that the deal would sign very quickly. It took a bit longer. And I was just
wondering what has been accomplished during say the roughly nine or ten days
here that weren't sort of in the cards in the beginning? And you also mentioned
that the deal was refined. It looks from the financial terms, that it's exactly
the same. I was just wondering what you meant by refined. And I have one
follow-up question.
(John Thain): Well, let me start on the second part and then maybe
we'll get some add-ons. First, Rich, thank you for upgrading your
recommendation. I understand you did that this morning. One of the big areas of
refinement was on the synergies. So we really spent a lot of time making sure
that the synergy numbers were both conservative and demonstrable. And so there
was a lot of work done on the synergy numbers themselves. The teams also have
been refining both the management structure and the board structure, and really
just putting, I would say, the fine touches to the rough outline that was
presented nine or ten days ago.
(Jan Michiel): And I could add to that. In the refining is the word on
the governance because we had the principals but before you sign, it has to be
on paper and very clear, particularly for an agreement that will last a long
time. What we specifically agreed there in terms of governance was that any
changes to the composition of the board or of the size of the boards or, for
instance, the principal that as long as the CEO comes from the American side,
the chairman will come from the European side and vice versa. Important
decisions to be made that all these things would be subject to a super majority
vote, which in practice, legally means that it requires at least two-thirds of
the board votes or 80 percent of all the outstanding shares of the company to
change this.
Understood. All this is written down nicely by lawyers and fully agreed
to between the principals.
(Caller): Understood. Okay, thank you. The one follow-up, and just to
get detail for one question.
(Caller): Hello. Angela Charles. I'm from the Associated Press.
It's about the trading hours. Could you explain that a bit? Does this
mean that you could trade, for example, stock that's listed on the New York
Exchange as soon as Paris opens at 3 A.M.? Second question. The Borse-Italiana
deal. How could that affect the board structure? There have been some reports
that that would tip the balance or put it an even balance with ten Americans,
ten Europeans. Thank you.
(Moderator): On trading of stock it will remain as they are at the time
being?
(John Thain): Well, the New York market's a little bit split because
the New York Stock Exchange itself opens at 9:30 New York time. But ARCA, NYSE
ARCA opens at 4 A.M. New York time. And so we already have quite a broad
overlap. And actually one of the opportunities is to offer the trading of both
sets of shares over a broader range of hours. And so that's one of the things
we'll explore.
(John Theodore): But it will remain the choice of the issuers. You
remember what I said about two regulatory regimes. These issuers will have the
choice of being more easily maybe dual listed. But is there one to stay listed
only on one side of the Atlantic. They will be traded on this side only. And
according to the regulatory regime of this side. The stock of dual-listed
companies will be traded 15 or 16 hours a day. So are already close to
one-hundred if I remember well. Dual list of companies in between NYC and
Euronext countries. But it will be the choice of the issuers. On both points, I
can say that what has been said, I am speaking under John's control is that if
Borse Italiana wants to join Euronext, the balance of the board will be 11 to
10.
(Operator): From German's Business Press, once again too about the PE
ratios, differential companies. A question for you, Mr. Theodore, shall I give
an answer for you about the question that critic said the deal wouldn't be
financially very interesting for the Euronext shareholders because NYSE Group is
buying Euronext shares with the highly valued NYSE shares and that the upside
for the Euronext shareholders isn't so enormous. Secondly, they claim there
wouldn't be a premium for the Euronext shareholders although NYSE is, in a way,
taking control because they have the majority. And second question. You said it
would not be sure
when the Euronext shareholders will have the last say on the deal. Can you just
make a rough estimation? It will be in the first half of 2007 or something that
was completely open. Thank you very much.
(Jean-Francois Theodore): I believe it will be before the date you are
quoting. But we cannot have a date. They will have the date say. And they will
judge the parameters you are speaking about. About premium. There is no premium
because it's a merger in between equals. It's not a takeover as you've seen by
governance. So no reason to speak about the premium. About the PEs, you have
seen the prediction. A) NYSE is higher than Europe exchanges but American PE's
are globally higher than European P's. B) We don't know what will be the PE of
NYSE Euronext.. C) If you are speaking of upside, so we're looking at the
operational merging of Euronext on one side and NYSE coming just out from a
recent merger. I believe that there is a stronger side on NYSE.
(John Thain): I would echo the last comment which is we have one
quarter's worth of results. And so I think there is, when people look at PE's, I
don't think they necessarily have the E-Bay part right. And so I think that
there is a lot more upside on the E part of the NYSE Group contribution here.
Could I add one thing here? All this PEs and all these numbers, I mean
one could do a lot of things with numbers. The market is not always right, of
course. But if we look at the market, also for the last few days, you could see
that the theoretical value of the NYSE offer values the two companies combined
at a level which is equal to the present combined market values. So apparently
the market thinks that this is not an unfair offer, which is not always the case
in bidding situations or proposals.
(Caller): Good afternoon. Monsieur Theodore. This afternoon you are
going to meet Mr. Capuano, if I'm right. Are you going to have any announcement
this afternoon about Borse Italiana? And secondly, I would like to know how does
it work the absorption of both Borse Italiana and other stock exchange in
Europe?
(Jean-Francois Theodore): Okay. So it will not be this afternoon. So we
had the meeting planned this afternoon. Not related to our corporation and
related or so to MTS. But it
will be myself and too exhausted this afternoon. So it will be next week. We are
meeting with Borse Italiana very often in WFE meetings, which Massimo Capuano is
chairman of the World Federation of Exchanges. But almost every month, since we
are partners in the MTS venture, I think that nobody's speaking with a different
option. Euronext is a federal model. You become a member of the federation with
the rights due to your rank, your importance. And your dynamism and we all know
that Borse Italiana is a very strong and dynamic partner.
(Moderator): Two questions coming in by phone now. And then I'll give
it back to you.
(Operator): We have a question from (inaudible) Mass Securities. Sir,
you have the floor.
(Caller): Yes. Good afternoon. Two questions. The first one is about
the price. When I compute the upper price I come up with 70 euros, which means
I'm near no premium whatsoever with this deal. And compute, come up with 70
B-euros. My question is do the board of Euronext, aren't you like setting the
company at a low price? The second question is with regard to the trading
platform. When you combine the cash trading platforms, will you be harmonizing
the pricing between Europe and the USA? Thank you.
(Jan Michiel): On the first one, I have already said that it's not a
takeover. It's larger. I believe we have the value of Euronext in consideration
and so to show we will have the last choice. The Euronext is trading roughly
around 70 at the time being with the stock price to go up slightly since this
morning.
I just want to add one thing. You also have to be careful to make sure
you're looking at the value of the deals when both markets are open and both
stocks are trading. If you actually look at that, the value of the deal, which,
of course, fluctuates as the NYSE Group stock price changes, the value of the
deal has pretty consistently been at a slight premium to the value of Euronext
shares.
On the second part of the question I am venturing into new ground
because we have not been so far in discussion but I would very much adopt when
we will have a trading platform, that we will harmonize the fee structures
because the economics of the American market and the
economics of the open market are quite different. For instance, if you look at
dissemination, these are huge figures and hugely regulated, also figures in U.S.
While in Europe, it's a completely different market in which Reuters and
Bloomberg are representing 80 percent of our business. So I think that each
continent, each economic logic and that's what we think at the time being.
(Operator): We have a question from the Daily Telegraph.
(Caller): Just this one question about the platform that you're
migrating to. Please explain. Which platform will that actually be? The French
one or the American one? Forecast writing.
(John Thain): The answer to that is not quite so simple because and
this is true when we look at our trading platforms even in the U.S. There are
different pieces to the platform and some pieces are better from one marketplace
and some pieces are better from the other. Actually Euronext's trading platform
is very, very powerful, very, very strong. But there are other pieces that, in
our platform, that are also very strong. So I think the analysis will really be
who is the technology provider and where can we pick the best pieces of each of
the platforms? I'll just give you an example. You know, the matching engines are
different than the information channels. And you can pick and choose between the
different structures as to who has the best matching engine, which has the best
information bust. And frankly, the technology provided through the ATOS joint
venture aims is actually very, very strong and we were very impressed by that.
And so it'll really just be a combination of the technologies that make the most
sense and are really the best.
(Moderator): I think we have the gentleman in the second row and then
the lady over there.
(Question): Hello. I would like to ask you if in the future, in the
next future there will be some agreement with stock exchange in Asia, or
somewhere else. Thank you.
(John Thain): When you create a global exchange, we've now linked the
U.S. and Europe and so the most logical place to look next would be Asia. But I
think that we have a lot on our plate for the foreseeable future. And so I think
we really will focus on this transaction,
first getting it closed, and then making sure we get all of the synergies and
the integration that we need to get. I think the question of Asia is certainly a
legitimate one and a strategic one but also one that has to be a little bit down
the road.
(Question): From Bloomberg News, how would you respond to a bidding war
if the Detusche Borse came out and made a better offer, sweeter offer? How would
you respond to that? Would you be willing to sweeten Euronext an offer? And also
for Mr. Theodore, maybe this was a question that they were trying to ask on the
phone before. Are you confident that you will be getting shareholder approval
for the deal? Some shareholders were kind of pushing for Deutsche-Borse
agreement. You said that as of today this deal is the best deal for Euronext.
Can you give a bit more details on why is this deal superior to the
Deutsche-Borse one?
(Jean-Francois Theodore): I think we gave all details in this
presentation as the reason why this is a better one. And in the AGM, in
Amsterdam, if you were not there, it has been Webcast. And in which I make
comparison in between the two proposals, governance twice and high price. And
explaining why the day before AGM's board I found the combination with NYSE more
attractive. And then there was noted at the AGM and it happens have one
important shareholder who was in favor of the convention who would be in favor
of her combination with the triple 30 AGM has now said that he strongly support,
and that's a big shareholder on both sides, joining between NYSE and Euronext.
(John Thain): Actually, I believe that that shareholder is the biggest
shareholder, certainly the biggest shareholder of the NYX and is certainly one
of, if not the biggest shareholders of Euronext. So this is a very significant
shareholder who is also very analytical and who says this transaction makes
sense to them. The answer to your question on Deutsche-Borse or for that matter,
anybody else, we have a deal here. We have an agreement between us. This is a
transaction that makes a lot of economic sense. There's a lot of value created
for both sets of shareholders. And we're not really going to speculate what we
might do if something else happened. Right now we're going to focus on getting
this deal closed.
(Question): I have one specific question then some more general ones. A
specific question, you said you're going to cut down on the number of data
centers. So I was just
wondering if that was going to lead to any job cuts? And then a more general
question. I think you said, Mr. Thain, that you believe this transaction could
enhance relations between the U.S. and Europe. So I was just wondering if you
think that NYSE and Euronext transaction could help break down the culture of
economic protectionism that we've had in Europe where we have now the many deals
with American companies and European companies and European governments, want to
keep the European companies in European hands. And a more general question. Do
you think NYSE and Euronext combination would be good enough to withstand the
possible combination between the London Stock Exchange and Nasdaq?
(Jan Michiel): Maybe I give answer on the center while Jean is thinking
about those questions. But at the center I think that with the experience of
Jean we have something interesting. And the vision is that when you have a
partner in IT, you are in the bit of a situation. You are in better situation to
close at that center and to have synergy because if you have a few hundred IP
people and the IP people are being asked at the time being to outplace, it's
easily done when you have a partner and trying to employ thousands. In our case,
I will speak only for Euronext, employs 47,000 people in Europe for the time
being. And when we had to close that center there was no outsource of our IT
people.
And your question about U.S. European relations and protectionist
tendencies, which by the way, I think there are protectionist tendencies in the
U.S. as well as in Europe. Which I think are not good either. And so I do
believe that this example of global, creating a global competitor, the example
of the regulators cooperating across the ocean between the U.S. and Europe, I
think will be a positive step, or a positive example for truly free trade and
true globalization. And at least will be one, I think, good example, of where
protectionist's tendencies really have not been visible. So I think it actually
is a good example on that front.
What I actually said in my commentary. One of the strengths that we
think the combination will bring here is on the listing side. Because as you've
seen the big global international IPO's, they have been split between Euronext,
London and Hong Kong. And I think that our combination will be much more
competitive with either London or Hong Kong on competing for those big global
listings.
(Moderator): Hand it over to the phone now.
(Operator): We have a question from Mr. Richard Herr, KBW Please go
ahead, sir.
(Caller): Good morning and congratulations. Just a quick question on
shareholder approval. What can move it from 66 and 2/3 to 50 points (Inaudible)?
Thank you.
(Moderator): Shareholder approval 50/50 or ...
(John Thain): It's a 50 percent simple majority.
(Moderator): That's right. Okay. Next question.
(Operator): We have a question form Mr. Roger Friedman, Lehman
Brothers. Please ago ahead, sir.
(Caller) John, I'm hoping you could give us perhaps a sense of the most
important reasons why you thought this particular transaction's the best/ from
your perspective as head of the NYSE, when we think about, you know, whether
it's global trading, trading derivatives, the opportunity to just get bigger and
get scale, is it to protect listings that have gone overseas? Can you maybe rank
your reasons?
(John Thain): Sure. When we talked about the strategy of NYC Group
going forward, we really talked about wanting to diversify both product wise and
geography wise and we definitely wanted to have a linkage into Europe because of
the importance, particularly of the euro as a currency, a global currency, and
also in terms of the strength of the European economy. The second piece is we
wanted to get into the derivatives business. The futures business is a very,
very good business. It's growing faster than the cash business.
And, actually, Euronext has not only a futures business but also an
options business that fits well with our own options business in the U.S. So
from a strategic fit both the diversification of products, the strength of
Euronext in Europe so the geographic diversification. And then there are very
strong position in derivatives and particularly in futures, all of those, and
the chart, we showed you the combined fit, product wise. It's a very good match.
It's a very good marriage. And then as we've talked over the course of the last
few weeks, the management teams fit well also. And so the teams work together
well. And so I think it's a very good balance. It
fits strategically. It's value creating to both sets of shareholders. And the
management teams work well together.
(Caller): Okay. Thanks. And my follow-up question is on the synergies,
when we look at some of the synergies that you've laid out here, including data
center consolidation, for example, it seems that some of those may, we would
have expected, for example, the four data centers to two in the U.S. would be
part of the ARCA NYC consolidation. I'm wondering if you can address if some of
those, if those are all really incremental or if they're all sort of part of the
longer-term plan that say, you or even Euronext would have pursued on their own?
(John Thain): One of the things we wanted to do particularly with the
one slide we showed you, is we wanted to vary clearly breakout and separate the
$120 million of synergies that are coming simply from NYC ARCA and the 250
million of incremental synergies that are coming from this transaction. And
there is no duplication there. There is no overlap there. We spent a lot of time
sorting that out. So the 120, which is clearly denominated, is separate from the
250 and those are incremental additive synergies.
(Moderator): Okay, we take the last question coming in by phone and
then we will have to stop. Please.
(Operator): We have a question from Mr. Daniel Goldberg, Bear Sterns.
Please, go ahead, sir.
(Caller): Good afternoon. My first question is, John, how does this
impact the hybrid plans and the expected rollout with all the consolidation
technology? Is there any impact on hybrid and the timing? And then the second
question would be talk a little bit about how you plan to finance the deal and
the dynamics around the decision to take cash versus stock for shareholders.
(John Thain): Sure. The first. It does not impact hybrid or hybrid
rollout or the timing of hybrid at all. And so the second part of your question
on the financing, based upon the current structure, this will require
approximately $3 billion of debt financing, which is very easy for us to do
ourselves. Certainly very easy for the combined entity to do. As you know, the
New York Stock Exchange Group has no debt at all. It has about $650 million of
cash. And
exchanges generate cash. And when you look at the combined companies, we have
very substantial cash flow generation. We believe we can pay that $3 billion of
debt inside of three years.
(Moderator): Okay. Thank you very much. We have to stop here. Sorry.
But we will be happy to answer your questions later today.
* * * * * *
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information set forth in this filing (including information included or
incorporated by reference herein) contains forward-looking statements, which
involve a number of risks and uncertainties. Euronext and the NYSE Group caution
readers that any forward-looking information is not a guarantee of future
performance and that actual results could differ materially from those contained
in the forward-looking information. Such forward-looking statements include, but
are not limited to, statements about the benefits of the business combination
transaction involving NYSE Group and Euronext, including estimated revenue and
cost synergies, the new company's plans, objectives, expectations and intentions
and other statements that are not historical facts. Additional risks and factors
are identified in NYSE Group's filings with the U.S. Securities Exchange
Commission (the "SEC"), including its Report on Form 10-K for the fiscal year
ending December 31, 2005 which is available on NYSE Group's website at
http://www.nyse.com and the SEC's website at SEC's Web site at www.sec.gov. and
in Euronext's filings with the Autoriteit Financiele Markten (Authority for the
Financial Markets) in The Netherlands, including its annual report and
registration document for 2005, which is available on Euronext's website at
http://www.euronext.com. The parties undertake no obligation to publicly update
any forward-looking statement, whether as a result of new information, future
events or otherwise.
NOT AN OFFER
This document shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S. Securities Act of
1933, as amended, and applicable European regulations.
ADDITIONAL INFORMATION ABOUT THIS TRANSACTION
In connection with the proposed business combination transaction, Euronext and
the NYSE Group expect that a newly formed holding company will file with the SEC
a Registration Statement on Form S-4 that will include a proxy statement of NYSE
Group that also constitutes a prospectus of the newly formed holding company.
NYSE Group will mail the proxy statement/prospectus to its stockholders and the
prospectus will be mailed to Euronext shareholders.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED BUSINESS COMBINATION TRANSACTION IF AND WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
You may obtain a free copy of the proxy statement/prospectus (if and when
available) and other related documents filed by NYSE Group and the newly formed
holding company with the SEC at the SEC's Web site at www.sec.gov. The proxy
statement/prospectus (if and when it becomes available) and the other documents
may also be obtained for free by accessing NYSE Group's Web site at
http://www.nyse.com and Euronext's website at http://www.euronext.com.
NYSE Group and its directors and executive officers and other members of
management and employees may be deemed to be participants in the solicitation of
proxies from NYSE Group stockholders in respect of the proposed business
combination transaction. You can find information about NYSE Group's executive
officers and directors in NYSE Group's definitive proxy statement filed with the
SEC on April 11, 2006. You can obtain free copies of these documents and of the
proxy statement prospectus (when it becomes available) from NYSE Group by
contacting its investor relations department. Additional information regarding
the interests of such potential participants will be included in the proxy
statement/prospectus and the other relevant documents filed with the SEC when
they become available.