Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of NYSE Euronext (UNKNOWN:UNKNOWN) surged 32% today after commodities exchange player IntercontinentalExchange (NYSE:ICE) agreed to acquire the New York Stock Exchange owner for about $8 billion.
So what: The cash-and-stock acquisition values NYSE Euronext at $33.12 per share and represents a 37% premium to its closing price on Wednesday. ICE is making the move to give it a strategic edge over main rival CME Group (NASDAQ:CME) -- NYSE also owns derivatives market Liffe -- and to gain cost synergies, but given its own stock's 3% drop today, Wall Street isn't thrilled with the price being paid to do it.
Now what: The deal, in which NYSE Euronext shareholders can chose either $33.12 in cash, 0.2581 ICE shares, or a combination of both, is expected to close in the second half of next year. "We believe the combined company will be better positioned to compete and serve customers across a broad range of asset classes by uniting our global brands, expertise and infrastructure," ICE Chairman and CEO Jeffrey Sprecher said . So while NYSE Euronext shares are likely all popped out at this point, ICE's bolstered competitive position and efficiency might help drive outsized gains over the long-term.
Interested in more info on NYSE Euronext? Add it to your watchlist.
Interested in more info on ICE? Add it to your watchlist.
Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of CME Group. Motley Fool newsletter services recommend NYSE Euronext. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.