And in this corner

Posted 2011 Apr 25

A couple of young up-starts battle it out in the ring to become the next “Champ.” Media hype is everywhere. Followers of each fighter are loud and passionate. The promoters are enjoying the attention and making side bets. I think of my father’s favorite boxers as he listened to the Friday night fights – guys like Tunney, Dempsey, Louis, Marciano, and Ali to name a few.

Well, we have a new style of Friday night fights. The Champ is the 219 year old New York Stock Exchange.

The Big Board, as it is affectionately known, is now a compilation by merger of the NYSE Group and Euronext – the European combined stock market.

The contenders for the title are DB and N/ICE.
DB – is the Deutsche Börse, AG that can trace its trading origins back to 1585! This exchange was formed through a series of mergers, the last in 1992. It’s a large and formidable challenger.

N/ICE is in the other corner. This contender promises the one-two punch of the NASDAQ, established in 1971, and ICE, the Intercontinental Exchange that began in the late 1990s as an exchange for trading energy commodities. They are fast, light and nimble.

The fight began February 15, 2011 with the announcement that Germany’s Deutsche Börse and NYSE had agreed to merge in an all stock deal. DB would have 60% ownership, NYSE, 40%. They would incorporate the merged company in Amsterdam, with the name of the merged exchanges still undecided. Estimated value of this merger is $9.64 billion.

The news hit the Street like a sucker punch – NYSE in the hands of a foreign exchange! Whaddya mean no NYSE? How could we lose an icon of American Capitalism?

The second punch was thrown by N/ICE – their offer comes in at $11.3 billion – offering cash and stock, and keeping “The Big Board” a US company.

The last round will begin on April 28th. That’s the date of the NYSE shareholder meeting to vote on the DB, or N/ICE merger offer.

This is a classic fight. Cigar smoke all but obscures the ring. I’m cheering for the underdog to win and keep the title- and the “Big Board” in the US.