NYMEX Chairman Richard Schaeffer Should Be More Tight Lipped

NYMEX Holdings (NMX) Chairman Richard Schaeffer recently shared some rather 8-K-worthy thoughts with a Deutsche Bank research analyst and institutional investors, reports Bloomberg. While fielding questions about potential business combinations, Mr. Schaeffer declared that any combination could yield up to $250 million in cost savings, as well as revenue synergies from better distribution in Europe and growth potential in clearing and from new products.

Now that $250 million figure seems a bit aggressive to us, given that the total operating expenses for NYMEX during the first six months of the year annualized comes to about $270 million...

And he didn't stop there. Schaeffer went on to give some great color on a cost cutting plan that's being mapped out for the exchange. Apparently, it may include selling its headquarters, which, according to Schaeffer, could be worth $500 million, reducing trading floor capacity--even eliminating up to 150 of NYMEX's 500 employees as of December 31, 2006. Gosh, knowing that a 30% headcount reduction is being mulled over has to be a real morale booster for the folks that work there, wouldn't you say?

In response to his loose-lipped comments, NYMEX decided to clarify (put a few disclaimers on) a few things:

However, given the preliminary nature of the discussions and the uncertainty that the Company will enter into any transaction, the Company cannot be sure of the extent of any cost savings or revenue synergies that may result, if any, from a business combination involving the Company.

...There can be no assurance that the Company will undertake a cost savings program (and, if a program is undertaken, the timetable for implementing any such program), whether such program would involve a sale of the Company's headquarters building (and, if the building is sold the timing and proceeds of any such sale) and the value of the cost savings that may be realized.

Well it sounded good anyway...

Comments

[robdepalma:]

I guess you own ICE

2007 Aug 23 10:02 AM