* Alleges $8.2 bln deal price undervalues stock
* Individual investor files similar case in Delaware court
By Nick Brown
NEW YORK, Dec 24 (Reuters) – A pension fund that holds
shares of NYSE Euronext has sued the exchange operator
over its proposed $8.2 billion sale to IntercontinentalExchange
Inc, saying the deal undervalues the company’s stock.
The New Jersey Carpenters Pension Fund late on Friday filed
a complaint in New York State Supreme Court in Manhattan
contending that NYSE Euronext breached its duty to maximize
returns for shareholders. The lawsuit seeks class action status
on behalf of other NYSE Euronext shareholders and aims to block
the sale.
It is the second such lawsuit filed against the exchange
operator since the deal was announced on Thursday. An individual
shareholder, Samuel Cohen, filed a proposed class action in
Delaware Chancery Court on Friday that also seeks to prevent the
buyout from going forward.
Under the deal, NYSE Euronext, which operates the New York
Stock Exchange, will sell itself to Atlanta-based ICE. The
stock-and-cash deal is expected to close in the second half of
2013.
At $33.12 per share, ICE’s offer represents a 28 percent
premium to NYSE Euronext’s closing price last Wednesday.
In court papers, the New Jersey pension fund said the deal
was based on a “hopelessly flawed process” that would favor NYSE
Euronext Chief Executive Duncan Niederauer and several members
of its board of directors.
The sale was “designed to ensure the sale of NYSE Euronext
to ICE on terms preferential to ICE and designed to benefit NYSE
Euronext’s insiders,” the pension fund said.
A spokesman for NYSE Euronext declined to comment. A
spokeswoman for ICE, which is also named as a defendant in the
lawsuit, did not return a call seeking comment.
The lawsuit also names as defendants Niederauer, NYSE
Euronext Chairman Jan-Michiel Hessels, and other executives and
board members.
The buyout is expected to help ICE compete in derivatives
trading against U.S.-based CME Group, owner of the
Chicago Board of Trade. Derivatives trading is highly profitable
for the exchanges, and new rules next year will dramatically
expand the demand for clearing over-the-counter contracts.
NYSE Euronext’s stock market businesses are less valuable to
ICE, and the company said it will try to spin off the Euronext
European stock market businesses in a public offering,
generating speculation it may also have little interest in the
NYSE trading floor.
Profits from stock trading have been significantly eroded by
new technology and the rise of other places for investors to
trade, including venues known as “dark pools.”
The cases are New Jersey Carpenters Pension Fund et al. v.
NYSE Euronext et al., Supreme Court of the State of New York,
No. 654496/2012, and Cohen v. NYSE Euronext et al, Delaware
Court of Chancery, No. 8136.
