NYSE Deal Called Fair to Members

The New York Stock Exchange’s deal to buy electronic trading company Archipelago Holdings Inc. is fair to NYSE seat holders, according to a fresh valuation of the deal by Citigroup Inc., the exchange said Wednesday.

Citigroup also said it valued the planned combination of the companies at $5.1 billion to $6.2 billion, depending on which methodology is used -- far below the more than $9-billion valuation implied by Archipelago’s closing stock price Wednesday of $58.50 a share.

The NYSE was pushed into doing the new valuation by dissident seat holders, who saw the deal as short-changing them and took the Big Board to court in an attempt to delay the transaction and improve the terms for members.

The dissidents are led by longtime seat holder William Higgins.

The deal would give the NYSE’s 1,366 seat holders $300,000 each and 70% of the new company. The remaining 30% would go to current shareholders of Archipelago.

In a letter to Justice Charles Ramos of New York’s Supreme Court, a state trial-level court, Citigroup’s investment banking division expressed the opinion that the deal was “fair, from a financial point of view” to NYSE seat holders.

In a statement of opinion, the Big Board reaffirmed its belief that the terms of the deal were “fair and equitable and that the merger is in the best interests of NYSE members, the exchange and America’s capital markets.”