NYSE EURONEXT ( NYX ) : Will The Fed Score For NYSE EURONEXT And NYMEX ? How The Fed Holds The Merger Deal In His Hands

Summer is almost over and still we have not heard any new news on the rumored NYSE NYMEX merger deal since it was first announced. Some people are dismissing the merger comments as business propaganda to prop up NMX shares. However the only thing that may be actually stopping the merger from taking place is something as simple as a real estate deal. Well its actually not so simple because the deal is practically in the hands of Ben Bernanke and it could be worth over $700M. The deal is being put in to limbo until the Fed makes his upcoming decisive decision to either cut rates or leave them alone.

Now, I know what you're saying, "NYMEX and NYSE wouldn't hold up such an important merger deal just for a real estate deal, and why does the Feds decision to cut interest rates effect the merger of the two exchanges ?" First of all the sale of the New York Mercantile Exchange building is no normal real estate transaction. In todays market it is estimated as being worth $ 500M . However, NYMEX wants more for their ten year old state of the art facility. In a recent statement they had already expressed that they wanted a "meaningful premium to the Company's current share price" in any deal and the same goes for their real estate.In the same statement the company said "There can be no assurance that the Company will undertake a cost savings program (and, if a program is undertaken, the timetable for implementing any such program), whether such program would involve a sale of the Company's headquarters building (and, if the building is sold, the timing and proceeds of any such sale) and the value of the cost savings that may be realized." If they were not serious about than they wouldn't be currently showing the building to a handful of prospective buyers. However the company is actively and aggressively trying to sell their building through global real estate advisor Newmark Knight Frank.When it comes down to it this is a typical case of a big baby (NMX )playing hard ball. NYMEX wants $700M or more for a building that is valued at $500M. The potential buyer, Japanese giant Nomura Securities, is eager to buy the property but they are also playing games. They are reportedly trying to hold off until they see a fed rate cut which would mean significant savings on such a large overseas financial transaction.They are waiting to see how NYMEX will react. NYMEX is anxious for the Fed to cut rates which would mean that they could actually get the pricey number they seek for their building. NYMEX also has pressure from NYX who is flirting with other exchanges.Yet, John Thain is happy to wait for NYMEX to make the deal which would trim the company in to an extremely efficient exchange that would in total afford nearly $1B in savings.NYX and NMX already have so many connections its hard to believe they wouldn't merge.More importantly, John Thain is on a capital raising quest to fund his obsession with taking over the lucrative world wide derivatives market and this sweetened deal will significantly raise his capital and power. They are all waiting to see what Bernanke will say and do. Until then do not expect to hear any significant news on the merger. Hopefully Bernanke will score big for NMX and NYX.

http://nyxeuronext.blogspot.com/2007/08/will-bears-take-all-honey-out-of-market.html
http://www.nypost.com/seven/08072007/business/nymex_lining_up_bidders_for_building_business_zachery_kouwe.htm
http://biz.yahoo.com/prnews/070821/aqtu159.html?.v=13&.pf=real-estate