Is the ICE/NYSE Deal a Good Fit?
FBN’s Charlie Gasparino on ICE’s deal to buy NYSE Euronext.
- Duration 7:07
- Date Dec 20, 2012
FBN’s Charlie Gasparino on ICE’s deal to buy NYSE Euronext.
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Hundred years of independence.
Charlie Gasparino right here take us through the -- first of all.
I'm going to know when you got the first call yesterday and broke the story what -- what did you hear what -- did -- surprise what we should point out that the journal had a first headlines journal had the merger -- I I heard something about -- like I did not confirm the person but they had the other headlines.
Of a merger what I was hearing was that it was a full out.
Acquisition to New York Stock Exchange getting -- By by the ice by the IntercontinentalExchange.
And that just blew me away right right it was indeed it's it's an amazing story you know it's you know you -- you know we fight for seconds here.
You know and I tell -- going on the air.
Basically saying that the New York Stock Exchange is about to be taken over make no bones about this this is not a merger of equals this is a takeover of the most.
One of the most venerable institutions in American finance to New York Stock Exchange it's been their for 200 years in steel but would agreement.
And my would treat as it trended and right without the carried acting out there on the tree that's -- -- called the but route would agree because -- made some.
They became essentially club of traders on that -- -- and it obviously expanded to.
Which period and he -- a beautiful headquarters the ice is getting agreed of course.
We know here's a thing.
-- when you start when I started to -- that it was actually.
A phenomenal story because here's -- yes the IntercontinentalExchange.
Was created only twelve years ago by Jeff sparks Parker -- a long time I guess -- In the in the energy industry.
What would it would energy ticket people really entity -- is a commodity that is traded she does -- commodities that are traded.
On exchanges because you wanna you wanna locking your cost of your energy company -- -- -- -- your prior alliance partner and does so.
He came up with a system that you could do this forget about the -- of Chicago where people scream at each -- or New York.
If any -- always -- in the New York Mercantile Exchange -- do with.
Electronically and he created this thing called the IntercontinentalExchange.
Twelve years ago and what is great about this is this yes there's something to be said for the New -- -- -- remaining independent.
But they are now part of an American company and entrepreneur award American -- toward Jefferies -- Created.
Ten billion dollars of wealth that's what -- market cap was before the deal Scott got a little because when you buy something -- stocks stock usually.
Causality -- create ten billion dollars worth -- well ten billion.
-- bull market cap and wealth in ten years it's pretty get rid itself -- be proud of these buy in new York stock change we're not selling the Germans.
That rather well let's remind people capable sort of force tried to do this right and regulators -- it will -- -- regulators in the in the indeed we should.
Regulators in in -- -- because they also stymied.
Ice and nasdaq's attempt to take over the New York Stock Exchange on antitrust grounds -- all the stock trading and listings you know you have accompanied this will be one place.
I don't think they're gonna do that here.
I mean I think this is a time one by the way you can see how this is attempting their work but let's let's just mean let's be clear this is kind of a perfect fit -- not much overlap there -- so they're gonna sell some stuff -- -- they're gonna -- your next.
But I think this is kind of a perfect fit and I think Duncan Niederauer I think is -- -- -- had no choice.
If you look at.
We should we should have a chart on on trading volumes in this kind of tells the story since 2008.
It's gone pretty much down hill.
Except for couple blips here and it needed to -- don't have -- -- if you look at that that just shows you where it's going they had the another thing was in 2009 was pretty you know token we talk about less than -- And in a few years.
So they had to do they needed to do the deal and.
On the floor traders -- -- -- one reporter who asked about that you know by skies of wondered.
Would I switch is an all electronic exchange kind of get rid of them and I and I think you know here's that's a pretty good -- of the other places that don't.
A significant hugely candidate but you'll please don't cover that they they really not doing their viewers any good -- what is it that.
This new business model hostile offer over NASDAQ did well there are people OK and I think that's a selling point for anybody that want to have their shares -- there if if we had a flash crash.
Usually it's people that kind of stepped in between and and rationally figure stuff out and I think.
Boats Brecher I don't Duncan hero who is pretty much of the vote -- of electronic trading for most of his career at Goldman when he continue such expert who obviously is a -- -- -- training.
I I -- -- talk to -- -- easily into view they both.
Have I believe have an appreciation for what what is the -- the floor is now they need to keep what they have now I don't think.
I think they know that you need some human beings I think they've got to look for I know they're plotting to kill the floor traders tomorrow.
I don't think so I think they know there's a business model reason to have them.
And that's essentially what they told me.
-- and I think that that is important because again when the human stepping in after the machines you know go crazy how we've we've seen it before and we were at this forward.
No love to get Terry Duffy on the ticket upgrade to put on a call we should say to Terry Duffy in the CME -- said his schedule did not permitted but we did make that effort and Hamas as scheduled as a permitted like today of one day.
And the other thing at about it Bob Bob -- of the Saint -- I I don't blame them for not wanting to go out there now.
They have to reassess but they are in competitive particularly NASDAQ small player.
There and do they get they have some competitive issues they really have to do something -- to deal with this these are all competitive business or publicly traded companies.
-- that we should take a look at what I would what was what NASDAQ is trading at right now -- actually up about 2% of us at last check his wife.
Cause people to see them as a takeover target.
Now the market is up a little bit that would see me doing CME was down it was the only change that was down because we'll bring -- -- here's NASDAQ people think.
They might be the buyer of NASDAQ now what's up 3% from I think people think.
CV this is what's out there is gonna -- the NASDAQ they think that's the logical move that's what's going on in the markets that's -- CB is down -- nasdaq's up I've been trying to.
I'd been out there asking people is there any talk about this.
I can't get a good read on -- but I could tell you that.
That is down 2%.
To get -- through there is some competitive pressure with this deal but more than that that is down because people are saying -- -- by NASDAQ acquire stock goes down you spending money require you the person.
That is being acquired right back back stock goes up because people gonna buy your shares right.
That's what you got there it to market -- saying there's a deal CB NASA watch.
For that Charlie -- possible deal CME about the market is saying that obviously now what will be watching okay.
-- -- -- Went to the called yesterday.
Americans -- that.
It doesn't prevail I don't reveal sources all sort of see all the emails and has an hour hi this is -- what you're out that we were on the air like almost -- I mean that we we smoked C I mean I don't like.
Being -- -- -- colleagues have a lot of friends there but we made him look at.
Debt I don't know who what else to say I don't what I was there that would never happen.
A connect the competition are thinking what am I celebrated -- a couple Martinis.