The New York Stock Exchange has inked a deal to buy the beleaguered American Stock Exchange for $260 million in stock as it looks to broaden its reach in options trading.
The deal, which The Post reported last week, will later include the proceeds from the sale of the Amex’s Lower Manhattan headquarters a few blocks from the Big Board’s Wall Street home.
The combination, which has to be approved by Amex members, gives a second US license for an options exchange and would make the NYSE the third-largest US options marketplace.
The announcement follows months of speculation over the fate of the Amex, which has struggled with lost market share and poor technology.
The Amex once hosted big-name stocks such as The New York Times Co. and The Washington Post Co., but now trades generally smaller companies that are often too illiquid to meet the standards of bigger rivals.
The deal is expected to close in the third quarter of 2008 and to boost the Big Board’s earnings in 2009.
Amex traders are expected to be relocated to the Big Board. The Amex’s historic building at 86 Trinity Place – a landmarked Art Deco building it moved into in 1921, is expected to sell for between $60 million and $90 million.
NYSE chief Duncan Niederauer said yesterday that the merger would result in about $100 million of cost savings.
Amex said its operating revenues for last year were roughly $178 million, and the company had a pre-tax net loss of about $36 million.
As of last year, Amex employed 471 people, but sources said about 100 employees were laid off last week, ahead of the deal.
“The American Stock Exchange has suffered over the years from poor governance, neglect, mismanagement, a bloated cost structure, challenged technology and generally a huge lost opportunity for all involved,” said stock exchange expert Larry Tabb. “However, while the Amex has been challenged, the Amex acquisition holds significant opportunities for NYSE Euronext.”