Capitol Hill appearance by NYSE canceled

By Sarah N. Lynch and Kim Dixon

WASHINGTON | Fri Apr 1, 2011 12:55pm EDT

(Reuters) - NYSE Euronext Chief Operating Officer Larry Leibowitz did not appear before a U.S. House antitrust panel on Friday, just a few hours after Nasdaq OMX and IntercontinentalExchange made a rival bid to acquire the exchange.

The proposed $11.3 billion joint takeover of NYSE by Nasdaq and ICE would be a 19 percent premium to the offer made by German competitor Deutsche Boerse.

Leibowitz had planned in prepared remarks to tout the proposed merger between NYSE and Deutsche Boerse. But lawmakers said the competing offer complicated the hearing, and they hope to hold a hearing in the future when all the companies can attend.

"At this point it would not be appropriate to take testimony only from the New York Stock Exchange without hearing the other companies," said Bob Goodlatte, the Republican who chairs the panel.

Ranking subcommittee member Melvin Watt said he agreed it was appropriate to cancel the appearance by Leibowitz for now. But he voiced some concerns that any hearings ahead of the two possible deals might be premature.

"I have some reservations about whether it is this committee's or the government's role to start to access competing merger proposals or takeover proposals before there is a final agreement," Watt said.

Leibowitz's prepared congressional testimony released on Friday did not reflect the morning announcement by Nasdaq and ICE. The subject of Friday's hearing before the House of Representatives Judiciary subcommittee was to examine competition and consolidation in the financial markets.

The Justice Department is expected to give any NYSE merger a thorough look, to see if it would reduce competition and drive up prices. Lawmakers have raised concerns about a German company taking over the NYSE, a U.S. icon.

"We believe that the proposed merger will strengthen the U.S. role as a leading capital market and bolster the nation's global competitiveness," Leibowitz said in his prepared testimony.

"Furthermore, the New York Stock Exchange trading floor, the physical building and the name on the facade will not change."

At least one lawmaker said on Friday he was disappointed that NYSE would not be in attendance, and said he was concerned about both proposed deals because they are bad for consumers.

Democratic Representative John Conyers called the Deutsche Boerse plan "totally unacceptable," because it would cut consumer choice and cost U.S. jobs.

Of the Nasdaq-ICE offer, he said: "The latest offer is worse. Now we are talking about General Motors and Chrysler coming together as if that is going to help the automobile industry."

Leibowitz had planned to tell lawmakers that there is intense competition among exchanges and as a result, trading fees for equities and options have fallen substantially over the last decade.

"Our merger will not impact this competitive dynamic in any way," he said in written prepared testimony.