Nymex confirms talks over merger

Nymex says it is looking to cut costs

Nymex, the world's largest energy futures market, has confirmed that it has held preliminary merger talks, but declined to say who they were with.

The company, which is the parent of the New York Mercantile Exchange, said it was talking to "certain parties about a possible business combination".

Nymex said any deal would have to be at a premium to its current share price.

The company was clarifying comments it made in a meeting with Deutsche Bank analysts and institutional investors.

On Tuesday after a meeting with Nymex chairman Richard Schaeffer and chief executive James Newsome, Deutsche Bank analyst Rob Rutschow wrote that "management was quite frank about the possibility of a sale of Nymex".

Cutting costs

Nymex is the parent company of the New York Mercantile Exchange - the world's largest physical commodities futures and options exchange, offering trading in energy and metals contracts as well as clearing facilities.

The company said that a deal could lead to $250m in cost savings.

It also confirmed other separate cost-cutting plans that could lead to between 100 and 150 job losses.

As well as reducing staff, the firm said it would look at selling "excess trading floor capacity, as well as a potential sale of the company's headquarters building".

However, while confirming it had held merger talks, Nymex said there was "no assurance that the company will enter into any transaction".

There has been a number of mergers and takeovers among financial exchanges recently as they seek to buy rivals in the hope that consolidation will cut costs and offer clients more products.

In March this year, the New York Stock Exchange completed its takeover of pan-European exchange owner Euronext for $14.3bn, creating the first transatlantic stock market operator.

In recent weeks, Nordic exchange OMX has become the latest target, with the Dubai stock exchange tabling a $4bn bid that trumped an earlier offer from the US's Nasdaq.