A New York Stock Exchange seat holder, who is suing the exchange over its planned merger agreement with Archipelago Holdings, sent a letter to the other 1,365 seat holders today claiming an independent valuation of the exchange and the merger deal are faulty.
In the letter, seat holder William J. Higgins said he retained Willamette Management Associates to conduct the valuation, which valued the Big Board between $5.9 billion and $7 billion, far greater than the $1.87 billion value that the merger agreement put on the NYSE.
"Based on this valuation, it is their (Willamette's) initial opinion that the 70/30 split as proposed in the merger with Archipelago is patently inequitable," Mr. Higgins wrote in the letter. "An equitable distribution of the equity of a combined corporation would allocate at least 88% of the stock to the NYSE seat holders. The current 70/30 split, therefore, would deprive the NYSE seat holders of equity worth at least $1.13 million per seat, at today's prices."
NYSE spokesman Eric Ryan declined comment. The NYSE is releasing the draft proxy statement on the merger deal today.