Less than a week after the NYSE announced its merger with Archipelago, which would convert the exchange to a publicly-traded company, a holder of one seat on the exchange, Kenneth G. Langone, has announced that he is putting together a consortium to buy both the exchange and Archipelago. Mr. Langone, founder of Home Depot, believes that the original merger undervalues the exchange.
The NYT today also suggests that Mr. Langone's quest has other motivations, including his resentment of Goldman Sachs. In the NYSE/Archipelago merger, GS advised both sides. In addition, GS owns 15% of Archipelago. The head of the NYSE, John A. Thain, is the former president and largest shareholder of GS. Henry M. Paulson Jr., CEO of GS is credited with the coup that resulted in Spitzer going after Dick Grasso and one director of the NYSE -- Mr. Langone. That's a lot of Goldman Sachs for anyone! Goldman's Sachs' response:
Life is full of conflicts, real and imagined.
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1. Posted by SB on July 21, 2005 @ 14:21 | Permalink
What are your thoughts on the DOJ take on this deal? Some say, there will be a duopoly after the Nasdaq/Instinet merger closes but is that really a bad thing for traders? Granted, there will only be a few smaller ECNs left but I cannot see how that would negatively impact competition. Nor have I seen any opposition to this deal. That leads me to believe that the DOJ will not hold-up or delay either merger. Do you agree?
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