Revised Fairness Opinion by Newly Named Independent Financial Advisor
to Be Distributed to All NYSE Seat Holders Prior to Dec. 6 Merger Vote
NEW YORK, Nov. 15 -Following two days of testimony on a preliminary injunction motion brought by a group of seat holders challenging its proposed merger with Archipelago Holdings, L.L.C., the New York Stock Exchange has agreed to obtain a new current assessment of the deal by an independent financial advisor prior to a December 6 vote by all seat holders. The new fairness opinion will be distributed to all seat holders in advance of the merger vote.
The settlement was reached in the midst of a week-long hearing before Justice Charles Ramos in New York State Supreme Court over seat holders' attempts to postpone the merger vote until certain conditions could be met, including the commission of a new fairness opinion on the deal untainted by what seat holders claimed were conflicts of interest between the NYSE, and investment banks Goldman Sachs and Lazard Freres.
Under the settlement, the NYSE and plaintiff seat holders would jointly select a new independent advisor, who would then produce a fresh financial report analyzing the transaction and including a fairness opinion. Under the terms of the merger first announced last April, seat holders were assigned 70% of the equity, a stake the plaintiffs argued was below the value of their stake in the Exchange.
The settlement stipulates that the new report must be made available five business days prior to December 6, so that all 1,366 NYSE seat holders have time to consider its findings ahead of the scheduled merger vote.
"This is a tremendous outcome for all seat holders," said James Sabella, a partner at Grant & Eisenhofer, co-counsel for the plaintiffs, including longtime NYSE seat holder William Higgins who brought the original action.
"Under the settlement reached in court, seat holders will now have the benefit of a financial analysis that is not only free of conflicts, but based on the most current, up-to-date information," Mr. Sabella continued. "Seat holders will be able to assess the merger based on what we hope is a much truer picture of Archipelago, as well as the value of their equity stake in a newly combined company.
"This case was as much about openness and full disclosure on the part of the Exchange and its board, as it was about bottom-line numbers on the merger," said Thomas Skelton of Lowey Dannenberg, co-counsel for plaintiffs. "We believe the settlement will much better inform seat holders on the merits of the deal in advance of the December 6 vote."
Wilmington, DE and New York-based Grant & Eisenhofer represents institutional investors in shareholder matters, including securities and corporate governance litigation. The firm, which has recovered more than $2 billion for shareholders in the last five years, is currently lead counsel in securities actions against Global Crossing, Tyco, Parmalat and most recently, Marsh & McLennan. For more on the firm, go to http://www.gelaw.com.
New York-based Lowey Dannenberg Bemporad & Selinger, P.C. has specialized in complex litigation for almost 40 years, and has recovered billions of dollars for its clients, particularly in cases involving violations of the corporate and securities laws and healthcare fraud. The firm represents institutional investors and public pension funds in major securities litigation, including representing the New York City Pension Funds in an individual action arising out of the collapse of WorldCom. For more on the firm, go to http://www.ldbs.com.
Philadelphia-based Raynes McCarty is an internationally renowned trial and appellate firm securing landmark results for its clients for over 35 years. For more on the firm, go to http://www.raynesmccarty.com.
Contact: Allan Ripp 212-721-7468 arippnyc@aol.com
Carla Main 212-721-7421 carlamain@aol.com
