NYSE Shareholder Meeting May Be a Shootout
The NYSE will host its annual shareholder meeting this Thursday at 8am ET at the NYSE.
This may be a bit of a shootout. First, many believe some kind of announcement may be forthcoming from Deutsche Boerse or NYSE Euronext prior to the Thursday meeting.
Obviously, NYSE CEO Duncan Niederauer will make his case for the Deutsche Boerse deal and likely provide more color on merger synergy and cost savings, but some believe the two will attempt to make some further sweetener to entice shareholders.
Which begs the biggest question: why has DB not raised its bid? The likely problem is that DB will need 75 percent of shareholder approval to raise the bid, a significant barrier. Sweetening the bid creates lower German ownership.
Nasdaq chief Bob Greifeld and ICE CEO Jeff Sprecher are unlikely to attend, but there is an outside chance they could pop up; they will certainly have surrogates there to ask questions for them, including the most obvious one: why won't you at least meet with Nasdaq/ICE in light of a financially superior offer? (David Faber reports: DOJ Seeks Additional Info from Nasdaq on NYSE Bid)
Also expect questions about the size of the breakup fee (about $350 million) but also about the walk away money — the top 5 NYSE execs would be getting something like $75 million.
The shareholder proxy vote may be a bit more than a pro-forma motion this year. Board members are re-elected on an annual basis; they need at least a 50% majority vote; otherwise they must offer their resignation, according to analysts. Since this is the Board that again re-affirmed their preference for the Deutsche Boerse's offer for the NYSE Euronext, you might be able to view this as a a gauge of support for the DB bid.
Sandler O'Neill's Rich Repetto told me that the only people that can vote are shareholders of record as of March 1, 2011...that means it is unlikely any ownership by Nasdaq or ICE will count in the vote.
One wildcard: there is a shareholder proposal in the proxy that would allow two investors with 10 percent ownership to call a special shareholder meeting. This would give shareholders the ability to vote on takeover offers that NYSE execs may not favor.
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