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Amex, PHLX to merge
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June 9, 1998: 7:26 p.m. ET
NASD/Amex family beats out Chicago for Philadelphia Exchange
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NEW YORK (CNNfn) - The Philadelphia Stock Exchange late Tuesday said it has agreed to merge with the American Stock Exchange.
As part of the agreement, Philadelphia, North America's oldest stock exchange, will become a charter member of the proposed National Association of Securities Dealers/Amex family of companies.
Amex merged with the National Association of Securities Dealers, which runs the Nasdaq stock market, in March.
The merger gives Amex an extra push in its bid to compete with the New York Stock Exchange. It also provides some stability for the Philadelphia Exchange, which has been without a permanent chairman since March.
The exchange was also recently criticized by the SEC for failing to meet regulatory standards.
In accepting Amex's offer, the Philadelphia Exchange rejected an offer to join forces with the Chicago Board Options Exchange (CBOE).
Paul Adair, a Philadelphia Exchange spokesman, said Amex's deal was more attractive because the exchange will continue operating from its Philadelphia trading floor for up to five years before moving to New York. CBOE wanted to move the Philadelphia floor to a new location in two years.
The agreement also grants Philadelphia Exchange seat holders 12-year, transferable permits to trade on the new floor. Adair said CBOE had offered five-year permits.
The merger requires approval from the boards of governors of all three companies, as well as Amex and Philadelphia Exchange members and the Securities and Exchange Commission.
"We fully expect that this combination will encourage investment, enhance the ability of companies to access financial resources and assure timely, informed execution of investment decisions," said Richard Syron, Amex chairman.
"Following CBOE's 1997 acquisition of the NYSE options business, we believe this further consolidation of the industry is an outstanding opportunity," he added.
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