Analysts say CME may sweeten terms of NYMEX deal

By Phil Wahba

NEW YORK, June 17 (Reuters) - Analysts expect CME Group Inc CME.N to do what it takes to nail down its planned acquisition of NYMEX Holdings Inc NMX.N, even if that means bowing to pressure to sweeten the purchase price.

The proposed merger of the two exchanges got a boost on Monday with an unconditional blessing from the U.S. Department of Justice. But CME still faces pressure from NYMEX members and shareholders who say the value of the deal is too low.

NYMEX executives will hold a special meeting with members on Thursday, attempting to placate a vocal but apparently growing minority that threatens to scuttle the agreement. Meanwhile, a group of NYMEX shareholders has sued the exchange and its executives and are threatening to torpedo the sale.

Ultimately, CME might need to revert to the same measures it used last year in buying the Chicago Board of Trade -- coming up with new and improved terms.

At a Sandler O'Neill conference earlier this month, CME Chief Executive Craig Donohue downplayed the importance of NYMEX, calling it "nice to have," but not essential.

But Sanford C. Bernstein analyst Brad Hintz said CME, the world's largest derivatives exchange, clearly wants to get its hands on NYMEX's lucrative and fast-growing energy business.

"I don't see how CME would let this get away," Hintz said. "This is a great opportunity -- they have to buy it."

By some estimates, CME already derives about 6 percent of its revenue from an arrangement by which NYMEX uses its Globex electronic trading platform. That deal, however, could expire in 2011.