NEW YORK - (Business Wire) Ralph DellaCamera, Jr., President of DellaCamera Capital Management, LLC, today issued an open letter to all holders of AMEX Membership Interests (collectively, the
“Members
”) in which he urged Members to vote against the pending acquisition of AMEX by NYSE Euronext (
“NYX
”) (NYSE Euronext: NYX) because the agreed price materially undervalues AMEX. In the letter, Mr. DellaCamera noted that, as structured, the NYX offer ascribes no value to the Options Clearing Corporation (
“OCC
”), the largest options clearing organization in the world, in which AMEX owns a 20% equity stake.
On January 31, 2008, Mr. DellaCamera and certain other AMEX members outlined their concerns about the proposed NYX transaction in a letter to the Board of Directors of AMEX (the “Board”). At that time, Mr. DellaCamera noted that the purchase price multiple of the NYX transaction was well below the multiple in comparable transactions and called for the AMEX Board of Directors to take action to maximize value for all AMEX members.
Mr. DellaCamera said, “We believe that NYX’s opportunistic offer, as currently contemplated, significantly undervalues AMEX and that Members should vote to reject it. As one of the last remaining independent exchanges in this country, the AMEX is a unique asset that will significantly benefit any acquirer. For NYX in particular, it would lead to substantial cost synergies and an ability to protect and grow market share, at a ‘fire-sale’ price.”
Added Mr. DellaCamera, “The fact that the offer ascribes no value to AMEX’s 20% stake in the OCC, an organization with over $117 million in revenue in 2007 and almost $59 million refunded to members, shows that the Board of AMEX has failed in their duty to extract full value. As a result, we will oppose any transaction that does not afford full value to the AMEX and its assets. We also urge all Members to reject the current NYX offer and demand the Board live up to its fiduciary duty and maximize value for all Members.”
The full text of the letter follows:
| Ralph DellaCamera, Jr. |
| c/o DellaCamera Capital Management, LLC |
| 200 Park Avenue, Suite 3300 |
| New York, NY 10166 |
| |
| March 12, 2008 |
| |
| Holders of AMEX Membership Interests |
| c/o The AMEX Membership Corporation |
| 86 Trinity Place |
| New York, NY 10006 |
| |
| Dear Fellow Holders of Regular and Options Principal Membership Interests: |
| |
| As many of you may be aware, I and other holders of Membership Interests are profoundly troubled by the proposed acquisition of The AMEX Membership Corporation ("AMEX") by NYSE Euronext ("NYX"). We believe that the transaction as proposed implies that the Board of Directors of AMEX (the "Board") is selling our valuable company at "fire sale" prices. |
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| For a variety of reasons, we believe that NYX's opportunistic bid materially undervalues AMEX. We take particular issue with the fact that NYX appears to ascribe absolutely no value to the Options Clearing Corporation (the "OCC"). |
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| Did you know the following? |
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- The OCC is the largest options clearing organization in the world and reported record volume in 2007 of almost 3 billion contracts.
|
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- This volume resulted in 2007 revenue of over $117 million, with the OCC refunding almost $59 million to its member firms.
|
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- As an indication of the potential profitability associated with the OCC, OCC’s cumulative refunds and discounts offered to member firms since 1974 is over $845 million, a meaningful portion of which have been received in the last few years.
|
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| AMEX holds a 20% equity stake in the OCC and yet there is little reference to the OCC in any financial information provided by AMEX. Furthermore, there is no reference whatsoever to the OCC in the Agreement and Plan of Merger that was filed or the so-called "fairness" opinion delivered by Morgan Stanley. Do you believe that the OCC has no value? Why has the Board made no apparent effort to extract value from, or even highlight the presence of, this very attractive asset? |
| |
| As has been previously articulated to the Board, we believe that the value of the OCC may be material and we will oppose any transaction that does not afford value to the stake in the OCC that AMEX holds. We believe that there may be creative options to derive value from the OCC and we would consider it a complete abdication of the Board's fiduciary duties not to explore these options aggressively and transparently. |
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| We encourage every holder of Membership Interests to demand an explanation as to how this Board could allow the transfer of AMEX's OCC stake without appropriate consideration and disclosure. If you are dissatisfied with the explanation you receive or the terms of the proposed transaction, please consider voting against it. We are in fact considering taking further steps to see that any transaction recognizes full value for AMEX. Finally, it is important that holders of Membership Interests share their findings and views, and we are available to discuss our opinions and insights with other holders of Membership Interests. |
| |
| Sincerely, |
| /s/ |
| Ralph DellaCamera, Jr. |
| |
| cc: The American Stock Exchange Board of Governors |
Sard Verbinnen & Co.
Media:
Dan Gagnier/Renee Soto, 212-687-8080
