Private equity giant KKR’s latest document on its lengthy route to becoming a publicly-traded company makes the intriguing suggestion that it could list on either the Nasdaq or the NYSE.  

The idea all along has been for KKR, after listing on Euronext through buying its Amsterdam-listed fund KPE, to potentially list on the NYSE, so switching to Nasdaq would be quite a suprise.

Press releases up to now have pinpointed the NYSE as KKR’s possible future home. However, today’s document is a filing to unitholders rather than a statement to the press, so it is more formal and looks at all possible eventualities (such as a long section on risk factors).

[extract] Following the consummation of the Combination Transaction, KPE and KKR will have the right to require that the other use its reasonable best efforts to cause interests in the Combined Business to be listed and traded on the New York Stock Exchange or The NASDAQ Stock Market at a future date. If such listing occurs, KPE would make an in-kind distribution of such interests to KPE unitholders, subject to applicable laws, rules and regulations, KPE units would cease to trade on Euronext Amsterdam and KPE would subsequently be dissolved and delisted from Euronext Amsterdam.

The NYSE and Nasdaq have been arch rivals for years and compete tooth and nail for listings. We’re betting this one won’t really be up for grabs though, and that KKR will settle next to rival Blackstone on the Big Board.

It's a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It's a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler -- inventor of the K-car and the minivan -- and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company's takeover by the penny pinching Belgians and Brazilians at InBev.

Gary Katz, CEO of Deutsche Boerse unit International Securities Exchange, insisted during his appearance at the Reuters Exchanges and Trading Summit that all has been sweetness and light since the Germans assumed control of the upstart American options exchange and that there has been "nearly zero turnover" since the takeover.

But Thomas Kloet, Chief Executive of Canadian exchange powerhouse TMX, was one of several executives at the summit who insisted that cross border mergers can often be a recipe for disaster and that the ideal mergers are "domestic roll-ups" like CME Group's takeover of Nymex and the Chicago Board of Trade or indeed TSX Group's takeover of the Montreal Exchange, which created TMX.

Implicitly criticizing some of the first-ever cross border deals in the sector like NYSE's merger with Euronext, Kloet said: "there are significant regulatory differences that make cross border mergers pretty difficult to do, especially when they start passing over salt water, so to speak."

Listen to the attached recording to hear the former ABN AMRO senior managing director's ruminations on exchange M&A in full.

A fertile planting ground for tech, biotech and even some energy offerings, Nasdaq OMX has historically struggled to lure listings in some other areas, notably financial services.

Now, that could be about to change, Nasdaq OMX President Magnus Bocker said at the Reuters Exchanges and Trading Summit. As Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, it sees financial services firms as one of the most promising areas.

That Nasdaq would at least be hoping to narrow the gap in financial services listings with NYSE, the traditional ruler of the space, is not as out of left field as it might sound.

The exchange has already made some inroads and can point to some recent conquests like CME Group, which moved from a dual listing on Nasdaq and NYSE to a sole Nasdaq listing. Northern Trust, the fund administrator which has weathered the financial crisis with relative ease compared with some larger rivals, is another bright point.

And looking forward, such longtime NYSE stalwarts as Morgan Stanley and Citigroup have both recently been reportedly eyeing spinoffs of high risk units -- like Morgan Stanley's trading desk and Citigroup's Phibro energy unit. And there's even talk that Bank of America could eventually spin off Merrill Lynch.

What a difference a day makes.

A day after college operator Bridgepoint Education Inc had to settle for a shrunken IPO, language instruction company Rosetta Stone actually priced its $112.5 million IPO above its estimate price on Wednesday, and has followed that up by rising 42 percent in its inaugural trading day Thursday. But that “pop” might be a deliberate marketing decision, rather than a major mispricing of the deal.

Much of Rosetta’s success may have had to with the small size of float– 6.25 million shares– which led analyst Ben Holmes of Morningnotes.com to say the IPO had “built it in demand.”

And any company hopes to price its deal to get a first day “pop” to reward investors for their risk-taking. IPO Boutique’s Scott Sweet said that Rosetta Stone’s enormous first day pop — if it holds, it will be the largest since Intrepid Potash’s 58 percent starting jump nearly a year ago — will ingratiate investors and make raising additional money through a follow on easier. (Rosetta Stone CEO Tom Adams told Reuters on Thursday the company had no plans now to raise more money.)

But typically in a down market, bankers say a deal should be priced ideally to pop by 20 percent, so Rosetta Stone’s 42 percent pop might be overdoing it by leaving so much money “on the table.” Then again maybe not.

Adams told Reuters that the IPO was a major part of Rosetta Stone’s efforts to build its brand, and get the prestige of a listing on the New York Stock Exchange, as it works to build its business abroad. In an unusual move, the company used its IPO to tie in a promotion featuring a free seven day trial for the first 25,000 people to sign up.

Rosetta Stone could probably have taken home another few million dollars, but as IPO Desktop president Francis Gaskins put it, “They bought millions of dollars in advertising by pricing the deal as they did.”

Stock exchanges in emerging markets have grown more sophisticated in recent years, giving Nasdaq and the New York Stock Exchange a run for their money in attracting new overseas IPO listings.

Yet last week, Chinese video games maker Changyou.com, made a spectacular debut on the Nasdaq, and on Monday, Israeli tech company N-trig, which makes pen and touch devices for notebook computers, said it was planning a Nasdaq listing in 2010.

But why would Changyou.com, for example, with virtually no sales to speak of in the U.S., list there, rather than on a Chinese exchange?

Changyou chairman Charles Zhang told Reuters last week: “The U.S. is still the most sophisticated market, especially for technology investors.” And the new rules recently announced to make China’s exchange attractive will take a few years to really draw IPOs, he said. What’s more, the liquidity in the U.S. stock markets is deeper than anywhere else.

And companies, foreign and domestic, want to list on the exchanges where their peers are listed. Changyou’s parent, Sohu.com, has been on Nasdaq since 2000, and competitors Giant Interactive Group, Shanda Interactive Group and NetEase.com are all U.S.-listed, so it would have made little sense to list elsewhere.

Fears about Sarbanes-Oxley, the corporate governance law many called onerous and said would drive IPOs away from U.S. exchanges, have also subsided, NYSE’s head of listings Scott Cutler said recently. In this scandal-ridden environment, maybe more oversight is turning out to be another selling point.

New York Attorney General Andrew Cuomo is barking loudly at execs of American International Group, threatening “significant legal ramifications” if they take bonuses for a job well done at the bailed-out insurance behemoth. Expect him to start bearing his legal teeth soon: fines, legal costs, penalties …
 
“Please inform my office as soon as possible what AIG plans to do with respect to executive bonuses and pay raises this year,” Cuomo wrote in a letter to the company’s chief executive, Edward Liddy. “As you know, I believe AIG’s decision has significant legal ramifications.”
 
So there’s the threat. Now what?
 
Remember Dick Grasso? The state of New York sued the former head of the NYSE over his nearly $200 million pay package. Grasso said he would give back $48 million in deferred pay if he got an apology. Four years later, it’s still not clear just how much he has been forced to give up.
 
In 2004, Grasso’s sin was a sign of the times. The supply of corporate largess far outstripped demand for outrage as the credit and housing booms made us giddy. Now, with taxpayers coughing up $700 billion in relief for the financial sector and around $150 billion being thrown into the black hole at AIG’s credit default swaps department, law enforcement can be expected to take on this compensation creature with a sharper set of teeth. Smelling their own blood, chiefs at Goldman Sachs and UBS have sworn off bonuses.
 
Deals of the Day:
 
* Struggling British sweets-to-CDs retailer Woolworths is in early-stage talks to sell its high-street business for what one industry source said was likely to be for a nominal sum.
 
* UniCredit’s Bank Austria is close to selling for 1.2 billion euros ($1.5 billion) profit-sharing rights in a vehicle that owns stakes in Austrian industrial firms, the Der Standard daily reported. 
 
* United Internet has dropped its bid for rival freenet’s DSL broadband business, the company said. 
 
* China’s Bank of Communications wants to invest $100 million in Taiwan’s Taishin Financial, as China and Taiwan work on a deal to boost investment between their financial sectors, media reported. 
* Western Mining said it plans to purchase a 39 percent stake in Xining Special Steel Group from its parent for 1.1 billion yuan ($161.2 million).

(PHOTO CREDIT: Brendand McDermid/Reuters)

Pity the guys who dreamt up two of Wall Street’s coolest tickers — DNA and BUD — both of which look set to be consigned to the dustbin of history.

Genentech grabbed the three letters synonymous with biotechnology by being in on the ground floor of the gene revolution. Anheuser-Busch was lucky enough to have a beer brand known everywhere by one syllable. Now both look doomed.

Genentech faces a $43.7 billion bid from Roche for the 44 percent of the Californian biotech group that it doesn’t already own. Genentech is expected to succomb, albeit after a possibly sweetened offer. Anheuser has already agreed to a $52 billion takeover by InBev.

Their demise may take some of the fun out of stock trading – but investors shouldn’t despair. The thoughtful punter still has other options.

For example:

- BID for auctioneer Sotheby’s

- HOG for Harley-Davidson

- TAP for brewer Molson Coors

- JAVA for Sun Microsystems

- CAR for Avis Budget

- PZZA for pizza company Papa John’s

- BLUD for blood test group Immucor

- LUV for Southwest Airlines (after its Love Field airport in Dallas)

- LVB for Steinway Musical Instruments (after Ludwig van Beethoven)

- LIZ for Liz Claiborne

- PUB for Britain’s Punch Taverns

- WOOF for pet healthcare provider VCA Antech…does that take the biscuit?

And not forgetting the grandaddy of them all:

- T for AT&T (it stands for telephone, of course).

Genentech, meanwhile, will at least keep one thing when it becomes part of a Roche — an ultra-cool address at 1 DNA Way, South San Francisco.

(Photos: Reuters)

The antagonists of former New York Stock Exchange CEO Richard Grasso haven’t fared well in the five years since he was ousted, amid a public outcry over his $187.5 million compensation package.

As the legal battle over his payday heads to the New York Court of Appeals, former Attorney General Eliot Spitzer’s reputation is in tatters, and many of the NYSE board members who forced Grasso out are now out of work themselves.

Tuesday’s trial could be a showstopper for Wall Street, reliving an embarrassing drama for the NYSE. Potential witnesses include U.S. Treasury Secretary Henry Paulson and ex-Bear Stearns chairman James Cayne, who were both members of the NYSE’s compensation committee — as well as Spitzer himself.

As the New York Times reported, “the misfortunes that have afflicted a long list of stock exchange directors, all of whom were handpicked by Mr. Grasso, is enough to make one wonder about evil spirits swirling in the stock exchange’s boardroom.”

If writing about music is like dancing about architecture, to what can we compare the difficult task of dancing about a stock exchange?

The Buglisi Dance Theatre took on the challenge this week, performing “Under the Buttonwood Tree.com (A Frenzy on the Floor)” on a stage in front of the New York Stock Exchange’s American flag-covered facade.

It began with a gold-bedecked woman, who rang a gong (a la the opening bell) while flanked by a squad of men carrying green flags. The dance company then performed a 35 minute history of the NYSE, from the Buttonwood Agreement of 1792 to the end of World War II. That’s right: no mention of the Dick Grasso years, or haunting pas de deux to represent disappearing floor traders.

The group’s energetic performance could open up a whole new world of financial commentary. How about the Bear Stearns saga as tragic ballet? Or the Microsoft-Yahoo follies? Add your own suggestions in the comments section.

In the video clip below, the narrators solemnly recite the dire events of World War I.

UPDATE: The New York Times has a perhaps more nuanced review of the performance on Friday:

Plenty went on, often too much. Though the spoken text was heavily amplified, you couldn’t always hear it through the volume of the recorded soundscape (as well as the loud noise of drilling and construction nearby). For the same reason, it was hard to realize that live music was also being played (by members of the Aeros Quintet). You couldn’t always see the stage for the number of people taking photographs of it.

DealZone apologizes if we obstructed anyone’s view.

Photo and video: Reuters