In a letter to exchange members, equity owners and staff last Wednesday, Nymex Holdings Chairman Mitchell Steinhause said the exchange board has received proposals from two private investment groups and will make a decision before the end of the month on whether to accept their proposals, move directly to an initial public offering (IPO) or take some other strategic alternative.
"During the months of June and July, we met with several top-tier private equity firms, each of which was interested in purchasing a minority interest in Nymex," Steinhause said. "After careful consideration and discussion with our advisors, the board permitted two investor groups to each conduct a three-week due diligence review of our business. The final due diligence period ended on Aug. 1. We have received and are evaluating proposals from each of these investor groups.
"At the same time, we continued to evaluate other strategic alternatives, including moving directly to an IPO on our own," he said. "I want to emphasize that no decision has been made yet about which path to take, and all options remain on the table."
Steinhause added that exchange management plans to present its recommendation to members, owners and staff at a general meeting of shareholders on Sept. 20. "This meeting will be informational only, and you will not be asked to vote for any proposal at this time," he said. "We will also update you on other exchange developments, including Nymex Europe Limited and the Dubai Mercantile Exchange."
Nymex is planning to open a new trading floor in London to compete head to head on Brent crude oil futures and other products with the International Petroleum Exchange (IPE), which went fully electronic several years ago and shut its doors on open outcry trading. Funding obtained through a potential Nymex IPO or other transaction presumably would be used in part on that endeavor and others, such as the Dubai Mercantile Exchange (DME), which would be the first commodity futures exchange in the Middle East. The DME also would offer open-outcry futures trading.
Steinhause said Nymex shareholders will have the opportunity to vote on any major transaction at a subsequent shareholder meeting called for that purpose.
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