Under the terms of the amended and restated merger agreement signed by the two companies today, the merger consideration paid to holders of PCX Holdings stock and options will be all in cash, rather than approximately 80 percent in cash and the remaining 20 percent in Archipelago common stock as originally agreed by the parties. Because an all cash deal will no longer require Archipelago to prepare and file a registration statement with the Securities and Exchange Commission (SEC) with respect to its shares, Archipelago and PCX Holdings believe that this change should accelerate the time to closing of the merger.
The overall structure of the total purchase price that Archipelago will pay at closing is not affected by the amendment. Archipelago will still pay an amount -- now all in cash -- that is equal to the sum of the value of shares of Archipelago common stock owned by PCX Holdings at closing (currently 1,645,415 shares), plus $17 million (subject to certain adjustments which are unaffected by the amendment).
As required by the original terms of the agreement, the value of the shares of Archipelago stock held by PCX Holdings will be determined using the average closing price per share of Archipelago's common stock for the 10 consecutive trading days ending on the last trading day prior to the closing date of the transaction (rather than the 10 trading days prior to signing the original agreement) because Archipelago entered into an agreement to merge with the New York Stock Exchange, Inc. on April 20, 2005. The exact amounts, in cash, that Archipelago will pay in the transaction will not be determined until closing.
The acquisition continues to be subject to approval by PCX Holdings shareholders and the SEC, as well as other customary closing conditions. PCXH expects to send a proxy to its shareholders within the next two weeks. Subject to such approvals and closing conditions, the acquisition is expected to close in the third quarter of 2005.
The amended and restated merger agreement also includes certain other minor changes to the original agreement that are contained in Archipelago's filings with the SEC.
