NEW YORK (Dow Jones) - Financier Kenneth Langone is mounting a rival bid to buy electronic trading platform Archipelago Holdings, a move rich in Wall Street politics that threatens to derail its proposed union with the New York Stock Exchange, according to people familiar with the matter.

The Home Depot (Research) co-founder and friend of former NYSE chief Dick Grasso quietly reached out to a number of Wall Street chief executives, asking them if they would be interested in participating in a counterbid for Archipelago.

Langone, according to some of the CEOs who spoke to him, is angry that investment bank Goldman Sachs Group (Research) took the rare step of acting as advisor to both Archipelago and the NYSE, a move many on Wall Street believe to be a conflict. He also thinks Archipelago (Research) is worth more than the NYSE is offering -- 30 percent of a new company that NYSE seatholders will get the rest of.

Now, Langone is considering mounting a counteroffer for Archipelago.

It is too early to say how much support Langone's bid will get. However, if the chairman of investment firm Invemed Associates LLC manages to secure serious financial backing, it could threaten the proposed merger of the NYSE and Archipelago, a deal that if approved by regulators will transform the 212-year- old NYSE into a publicly-traded company and push its largely human-based trading floor head first into the world of electronic trading.

Langone declined to comment. "I am not saying anything. I don't know where you got that," he said when reached at his home Saturday. The NYSE declined to comment. A spokesman for Goldman Sachs said he found news of Langone's bid " curious."

Langone, these CEOs say, has indicated he already has lined up some support and has requested a meeting with a number of Wall Street chiefs in order to gauge their interest in participating in a rival bid.

No date has been set for the meeting, these people say. Some Wall Street CEOs say they are reluctant to attend but may send a representative.

One thing is for sure: Langone's bid is loaded with Wall Street politics. He is a longtime friend of Grasso, who in the fall of 2003 was ousted from his job following a public outcry over his $200 million-plus compensation package, which he amassed during his 35-year tenure at the NYSE.

Goldman Sachs chairman Henry Paulson Jr ., a former NYSE director, voted to get rid of Grasso and is largely viewed by supporters of Grasso as the ringleader who worked behind the scenes to have him removed from the NYSE. In the end, the board voted Grasso out. Not longer after, Goldman president John Thain was installed as NYSE CEO, replacing Grasso .

New York State Attorney Eliot Spitzer is suing Grasso, seeking to force him to give back part of his pay package. Langone , who chaired the NYSE's compensation committee for part of Grasso's tenure as NYSE chairman, is also a subject of Spitzer's lawsuit. Langone , claims Spitzer , kept key details of Grasso's pay from the larger board.

Grasso and Langone have said they did nothing wrong and have vowed to fight the charges.

It now appears the sparks may start flying before the court case, scheduled for 2006, begins. This time, Langone's anger at Paulson is focused on its hand in orchestrating the NYSE's acquisition of Archipelago, which has been offered a 30 percent stake in the new company, NYSE Group Inc., that will be formed.

Goldman wears many hats in the deal. It acted as financial advisor to both the NYSE and Archipelago. As well, it has a 15 percent stake in Archipelago and owns Spear, Leeds & Kellogg LLP, a specialist firm that owns seats on the stock exchange. Goldman would get shares in NYSE Group from both of those interests, giving it a stake of less than 5 percent.

As well, Thain still has deep ties to Goldman, located just down the street from the NYSE.

It is rare, but not unheard of for a firm to act as advisor to both sides of a transaction. Based on records compiled by Thomson Financial, an adviser has worked for both sides in fewer than 500 of the 145,000 deals announced since 1982.

Goldman, for instance, hasn't been an adviser on both sides of a transaction since 2001, and played that role in only eight transactions in the 1990s, according to Thomson. Still, in this day and age of heightened regulatory scrutiny and sensitivity to conflicts, many executives on Wall Street have expressed shock that Goldman decided to act for both parties.

They also add Goldman was helping to set valuations of businesses for which it was a direct beneficiary.

"If the clients don't think there is a conflict, there is no conflict," said a Goldman spokesman.

Some of the CEOs Langone has reached out to say they share his view on Goldman's involvement.

"Goldman is getting this for a steal," Langone said to one of the Wall Street CEOs he talked to last week, according to one person familiar with the matter.

It may not be easy for Langone to pry Archipelago from the clutches of the NYSE. The firm's agreement with the NYSE has provisions that make it difficult for the firm to accept a richer offer, according to a person familiar with the contract.

The NYSE declined to comment. Still, news of a rival bid could be good for Archipelago shareholders, which have already seen the value of their shares increase 58 percent since the merger was announced.

It is too early to say how much the new company will be valued at, but based on Archipelago's stock-market value Friday of $1.4 billion, the combined company is currently worth about $4.7 billion .

However, NYSE seat holders -- who will get $300,000 in cash plus a 70 percent stake in the new company and who have been grumbling that the deal doesn't give them enough -- may see their stake fall even further if Langone's bid for Archipelago picks up steam and the NYSE is forced to make a richer counteroffer.