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NYSE in talks on acquisition or alliance

Some analysts have said NYSE may bid for the LSE while others say it might target either Euronext NV or Deutsche Boerse AG.

india Updated: Apr 15, 2006 17:19 IST

The New York Stock Exchange (NYSE) said it was in talks regarding an acquisition or strategic alliance, in a further sign major world exchanges are getting ready to consolidate the sector.

Recently listed NYSE Group Inc said in a filing to the Securities and Exchange Commission, a US regulator, that merger activity by other exchanges threatened the position of the world's largest stock market in an intensely competitive industry.

The move this week by rival Nasdaq Stock Market Inc to become London Stock Exchange Plc's largest shareholder has heightened speculation of imminent mergers, pushing up bourse share prices even further.

"The market for acquisition targets and strategic alliances is highly competitive, particularly in light of increasing consolidation in the securities industry, which may adversely affect our ability to find acquisition targets or strategic partners," NYSE said in the filing posted on Friday to the SEC's Web site.

"We are currently engaged in discussions with certain participants, although no definitive terms have been discussed or agreements reached."

NYSE said it would need to respond to potential opportunities quickly and decisively and a strategic transaction may occur at any time.

The NYSE gave no other details, but some analysts have said it may bid for the LSE while others say it might target either Amsterdam-based Euronext NV or Frankfurt's Deutsche Boerse AG, the two other big European markets.

LSE shares have doubled this year, Euronext shares have leapt by half and Deutsche Boerse and Nasdaq stock are up more than 20 per cent.

NYSE shares have jumped nearly 17 per cent since it bought and then listed through electronic rival Archipelago in March, while shares in Singapore Exchange, which has said it is open to partnerships, have jumped 44 per cent in 206.

NYSE listed Nasdaq's purchase of a 14.99 per cent stake in the LSE and strategy deals made by smaller exchanges in Philadelphia and Boston as signs of increasing competition at home and abroad.

Nasdaq this week declined to comment on whether it would buy more LSE shares. The purchase came two weeks after it dropped a 2.4 billion pound ($4.2 billion) bid for the LSE.

The 300-year-old LSE, which has been wooed by suitors as varied as Australia's Macquarie Bank Ltd. and Deutsche Boerse, said this week it was considering talks on tie-ups with other exchanges but could thrive on its own.

Euronext and Deutsche Boerse are also in exploratory merger talks and some analysts suggest the hunted LSE may soon turn hunter in pursuit of its own acquisition.

First Published: Apr 15, 2006 17:19 IST