New York Stock Exchange - Bid for Euronext

In April 2006, Margaret Tutwiler, the NYSE’s Executive Vice President in charge of communications, drafted Tulchan in to advise the NYSE, the world’s largest and most iconic equities market. They were bidding for Euronext, the first genuinely cross-border exchange serving regulated cash and derivative markets in Belgium, France, the UK , the Netherlands and Portugal. They engaged us on a project basis for the duration of the bid.

We were asked to be the NYSE’s eyes and ears in Europe as the company sought to expand outside the US in accordance with the strategy outlined by John Thain, the new CEO. There were a number of challenges: the market and the media were not familiar with the NYSE, didn’t understand the strategic rationale for the deal and had little appreciation of its size and scale; any silence on the part of the NYSE was automatically misinterpreted as arrogance.

In the major European capitals there was also a lack of detailed understanding of the NYSE’s proposal to acquire Euronext amongst key financial journalists and no real knowledge of the NYSE’s key players. Inevitably, as the bid progressed there were several instances of ‘economic patriotism’, national pride and political posturing to be understood, explained and countered both publicly and privately. As competition to acquire Euronext hotted up, the amount of misinformation propagated by rival parties increased and necessitated regular and detailed explanation and rebuttal.

We helped to develop the messages at the start of the communications campaign. These focussed on the growth in the NYSE’s markets, the potential growth to be derived from an NYSE/Euronext merger and the value and deliverability of the NYSE’s offer. This last aspect was particularly relevant as other players moved in on Euronext in the context of consolidation of stock exchanges around the world.

Tulchan worked closely with the NYSE communications team to put a network of agencies in place in France, Germany and the UK to develop a thoroughly unified communications campaign. This meant continuous coordination and feedback, including Tulchan’s daily publication of an English language digest of all that day’s relevant articles in the UK, French and German media.

Together we scored a number of successes in reaching out to key European media at a time when rival suitors for Euronext were becoming ever more plaintive and, to some, incredible, in their claims about the business and the market environment. So journalists could see the operation first hand and meet the key senior executives, we organised a UK press visit to the NYSE, timed to coincide with the introduction of the NYSE’s new Hybrid dealing model to heighten interest and awareness. We also proposed a strategic stakeholder communications programme to use third parties to influence sentiment and opinion. We advised the NYSE on the difference between meeting UK and US investors and provided numerous briefs and backgrounders on key financial journalists. Daily feedback on how influential journalists were interpreting the story and whose views they were using was also important throughout.

We worked closely with the NYSE’s financial advisors Citigroup to help UK journalists understand the motivation of rival suitors for Euronext and we also spent a lot of time and effort explaining the complex workings of stock exchange regulation.

The deal cleared regulatory authorities in the US and each of Euronext’s regulators from the European college of regulators. It also cleared Brussels legislation and UK and French market authorities. Deutsche Borse, the main rival bidder, withdrew from the fray towards the end of 2006 and the deal was approved by Euronext’s shareholders on 19 December and by the NYSE’s shareholders on 20 December 2006. We anticipate that the deal will close in the first quarter of 2007 and have been retained by the NYSE as their London agency.