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Justin Grant
Justin Grant
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Could CME Launch Hostile NYSE Bid? Rumors Swirl

Is Deutsche Borse’s bid for NYSE Euronext is turning into a transatlantic steel cage match?

Is Deutsche Boerse's bid for NYSE Euronext is turning into a transatlantic steel cage match?

Faced with the prospect of being dwarfed by a behemoth featuring the Big Board, plus Europe's two largest futures exchanges, CME Group is reportedly considering a hostile bid of its own. And numerous reports say they may enlist Nasdaq OMX Group's help to get it done.

From Crain's Chicago Business:

"Anything's possible," said Paul Zubulake, senior analyst for futures and options at Aite Group LLC, a financial services market research firm in Boston. "Would it make sense? Sure."

In a statement CME Group said, "It is our policy not to comment on rumor or speculation." "We remain committed to creating shareholder value by executing our strategy to pursue organic growth opportunities in our core derivatives business, expand globally, and extend our capabilities into OTC markets and index services," CME said.

If CME can somehow pull this off, it'll probably have xenophobes on Wall Street rejoicing since there've been complaints across the industry about the preeminent symbol of American capitalistic dominance falling under foreign control.

Yet CME, which handles some 97 percent of all U.S. futures trading, wouldn't be driven by patriotism to make such a move. Experts say the German-owned bourse's takeover of NYSE Euronext could undercut CME's efforts to expand internationally , while threatening its position as the kingpin of U.S. futures trading.

Nevertheless, CME is distancing itself from the takeover speculation. And the Wall Street Journal points out that CME has said in the past that it had no interest in entering the stocks business because of regulatory complexities and low margins.

From the WSJ:

CME Chief Executive Craig Donohue last summer told investors that the company would eschew the sort of large-scale deal making that vaulted CME far ahead of rivals in the futures market over the past decade. CME spent about $20 billion in purchases of the CBOT and Nymex ahead of the 2008 financial crisis.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
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