Nymex Holdings Inc., the holding company of the New York Mercantile Exchange (Nymex) said last week that its shareholders have "overwhelmingly approved" the transaction by which General Atlantic LLC will invest $160 million for a 10% equity stake in Nymex.
The initial $135 million investment deal was signed in November 2005 (see NGI, Nov. 21, 2005). In February 2006, the deal was revised to $160 million (see NGI, Feb. 13).
The revised definitive agreement continues to contain provisions to support and protect Nymex's open outcry trading, including a requirement for the continued financial support for technology, marketing and research for open outcry. These provisions also state that core futures and options contracts may not be eliminated without a vote of trading rights holders, as long as specified liquidity requirements are met. If the exchange ever terminates open outcry trading of a particular product, trading rights owners will receive a 10% royalty payment based upon the electronic trading of that product.
Of the total shares voted at a special meeting of Nymex shareholders on March 13, more than 93% voted in favor of the transaction. Nymex and General Atlantic expect to complete the transaction, which values Nymex's equity at $1.6 billion, on Tuesday.
"We are pleased that our members and shareholders agree that General Atlantic is the best partner to help us make Nymex more valuable through a possible [initial public offering] and over the long-term," said Mitchell Steinhause, chairman of Nymex. "The Board looks forward to working with our new partners at General Atlantic to build on Nymex's success and position the exchange for continued growth well into the future."
General Atlantic President Bill Ford, said, "Our goal is to help Nymex extend its leading competitive position in the energy and metals market and to create lasting value for its stakeholders." He will join Nymex's board following the completion of the transaction.
"We look forward to working with our new partners at Nymex to prepare for a possible IPO and to build a lasting franchise that will remain the preeminent marketplace in the world for energy commodity futures trading," Ford added.
In other news, Nymex reported last week that a seat on the Nymex Division sold for a record $3.9 million, which surpasses the $3.8 million record set on March 10. Ownership of a seat on the Nymex Division also represents a share of common stock in Nymex Holdings Inc., which announced strong 2005 earnings (see related story).
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