Where the Nasdaq sees cost-cutting opportunities in its joint bid for the New York Stock Exchange, companies that list on the exchange may see higher fees or less choice in where to list in the first place.
That was the initial reaction Friday from industry experts after Nasdaq OMX Group and IntercontinentalExchange launched a $11.3 billion offer for NYSE Euronext.
The fusion would create an exchange monolith that would give issuers one primary option for stock listings in the United States, and would give data vendors one large source for the information they sell to customers.
Few seem to publicly relish that prospect.
"From an issuer standpoint we like (two exchanges) because it gives us the chance to decide what makes more sense for a company listing," said Jeff Morgan, chief executive of the National Investor Relations Institute.
Morgan and others saw the biggest squeeze at the lower end of the spectrum, for companies considering initial public offerings in the $50 million range and other small companies who still have to make the public-versus-private decision.
"The companies that this is going to affect are on the margins, mid-to-lower cap companies that see (listing fees) as a not-insignificant expense and can attract private capital for years to come," said Vince Ryan, a senior editor at CFO magazine and CFO.com.
The fee issue is certain to be a subject of debate, given the disparity between Nasdaq's listing fees and the much higher fees at NYSE. Bankers said any effort to raise fees would likely run into resistance.
"You may get some creep but it would be something (regulators) would scrutinize carefully," said Tim Gould, head of U.S. equity capital markets at Macquarie.
To be sure, there will be alternatives for companies considering other listings, most notably BATS Global Markets, which is planning to list stocks as early as the fourth quarter.
But smaller companies may be motivated to forgo listing entirely.
"Even if there's no competition among public exchanges in the U.S., there's a lot of private capital out there," CFO magazine's Ryan said.
NIRI's Morgan said while things were still at a wait-and-see stage for issuers, this community should be "at the table with a voice" in the discussions.
Besides being a platform for share listings, the exchanges are also substantial data vendors.
Many companies, including Thomson Reuters and competitors like Bloomberg, News Corp's Dow Jones and FactSet Research Systems, rely on the data they get from the exchanges for their products.
All four declined comment on the Nasdaq offer, though at least some are expected to eye the bid cautiously for its future implications.
Thomson Reuters CEO Tom Glocer was asked about exchange consolidation in February on a conference call with analysts, and said it ultimately did not affect the business much.
"In terms of the impact on our business, unless the entire world moved to one single trading venue, which I think is very unlikely, it is largely neutral," Glocer said.
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