German stock exchange Deutsche Boerse said Monday that it had agreed to buy International Securities Exchange Holdings Inc., operator of the second-largest U.S. market for options, for $2.8 billion.
With shareholders of New York-based International Securities getting a premium of 50% for their shares, the offer was viewed on Wall Street as one of the most aggressive during a period of growing consolidation among global exchanges. It also upped the ante for NYSE Euronext and Nasdaq Stock Market Inc., both keen on expanding further into option trading.
Deutsche Boerse was under pressure to make an international acquisition after its efforts to buy Paris-based stock exchange operator Euronext were foiled by the New York Stock Exchange's purchase.
Analysts speculated that NYSE Euronext Chief Executive John Thain might try to upset Monday's deal. He wants to expand NYSE Euronext's option platform and hasn't ruled out doing so by acquisition. International Securities, whose headquarters is around the corner from the NYSE trading floor, would meld with NYSE's London-based Liffe option exchange, acquired as part of the Euronext deal. Plus, International Securities' two top executives -- co-founders David Krell and Gary Katz -- used to run the NYSE option business.
NYSE declined to comment.
Regardless of whether NYSE Euronext makes a competing bid, Deutsche Boerse's move could spur deals by other option-market operators.
Intercontinental Exchange Inc. has bid $9.6 billion for the Chicago Board of Trade, which is also considering a rival $8.2-billion offer by the Chicago Mercantile Exchange. The Philadelphia Stock Exchange, the third-largest U.S. option market, is said to be in talks with rivals that include Nasdaq. The London Stock Exchange has fought off several bids, including a hostile one from Nasdaq, which is now its largest shareholder.