Fight for NYSE Has Only Just Begun

Now, we wait.

The somewhat improbable, though long-awaited bid from Nasdaq and ICE was presented Friday with the desired effect. It has sent shares of the NYSE up sharply (not to mention shares of the Nasdaq) and has changed the dynamic in this now contested situation.

Oliver Quilla for

Anyone expecting a swift resolution of this contest, however, is likely to be disappointed.

It will likely be weeks before the NYSE Euronext responds to the $42.50 dual stock and cash NASDAQ/ICE bid , and the expectation is that when that response comes, it will be in the negative.

After that, months may pass before we get the action that will truly determine a winner. That process may not occur until the NYSE shareholder vote on its deal nears. A time when it will become clear to Deutsche Boersewhether it has a shot of carrying the day or whether it needs to increase its offer. And of course, we can expect that if that increase comes, Nasdaq OMX and ICE have a bump to give as well.

If Nasdaq’s stock price continues to maintain its current height (it is up today on short covering, buying of one large value oriented hedge fund and some relief that it isn’t shouldering more of the financial burden) and ICE doesn’t shed more of its price it may be near impossible for DB to carry the day (the current NDAQ/ICE bid is worth about $42.80) with its current bid (unless it figures out a way to get it’s stock price up sharply).

The key between now and then and the eventual conclusion of any deal (I can’t see how it doesn’t extend into next year) will be on the regulatory front.

Despite its assurances of confidence and vague allusions to a global market, the fact remains that under U.S. antitrust law it’s difficult to understand how the NYSE and Nasdaq will be allowed to become one company.

Meanwhile, NYSE and DB are not without their own challenges in Europe, where they must gain clearance for merging their European derivatives operations.

All of this is to say — stay tuned for a very long and bumpy ride.

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