The New York Stock Exchange’s proposed purchase of Chicago-based Archipelago Holdings Inc. is “fair,” according to the evaluation by Citigroup Inc. that was done to settle a lawsuit that sought to block the transaction.
The suit, filed by 10 dissident members in May, argued that the exchange negotiated the deal with conflicted advice from Goldman Sachs Group Inc. and was overpaying by ceding 30 percent of the combined company to Archipelago.
Citigroup’s bankers got $3.5 million for the evaluation, according to documents posted on the NYSE’s Web site. The report comes less than two weeks before the NYSE’s 1,366 members and Archipelago’s shareholders vote Dec. 6 on the Big Board’s proposed purchase of Archipelago.
The deal will transform the NYSE into a for-profit public company with a market value of about $9.4 billion. An NYSE seat sold Tuesday for a record $3.5 million. Archipelago’s stock has nearly tripled this year, to $58.50.
The dissident group, led by former floor broker William Higgins, decided to settle their lawsuit, which could have delayed the vote, after the Big Board agreed to a new review. Citigroup was selected by the exchange and the dissident group, and Goldman didn’t play a role in its evaluation.
As part of the settlement, the exchange agreed to pay the plaintiffs’ legal fees. The amount will be settled by a New York state judge at a hearing scheduled for Dec. 5.
“We are pleased that the Citigroup Global Markets Inc. fairness opinion validates the terms of our planned merger with Archipelago,” the NYSE said in a statement.
“This opinion reaffirms the NYSE board’s belief that the terms of this transaction are fair and equitable and that the merger is in the best interests of NYSE members, the exchange, and America’s capital markets.”
