Billionaire Kenneth Langone, who's considering a takeover bid for the New York Stock Exchange (NYSE), wants to close its trading floor...

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Billionaire Kenneth Langone, who’s considering a takeover bid for the New York Stock Exchange (NYSE), wants to close its trading floor, ending the way the world’s biggest stock market has operated for more than two centuries.

The plan would be phased in over several years and would change the NYSE, where much of U.S. stock trading takes place face to face, into an electronic trading network, said a person familiar with Langone’s thinking who declined to be identified. Langone, 69, has yet to make a proposal to Big Board seat holders, who own the exchange.

An offer from the former NYSE board member would disrupt Chief Executive Officer John Thain’s effort to turn the 212-year-old exchange into a publicly traded, for-profit company through a merger. Langone’s plan to cut costs may risk the jobs and support of many of the 3,000 brokers, traders, clerks and auctioneers, called specialists, who work on the trading floor at the corner of Broad and Wall streets in Manhattan.

“Specialists have a lot of seats,” said exchange member William Higgins, 69. Bidders for the NYSE should “want to make friends. You don’t want to make enemies.”

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John Mack, the former Credit Suisse First Boston CEO and Morgan Stanley president who’s helping with the potential bid, said yesterday that he asked Thain to meet with Wall Street firms seeking additional information on Langone’s proposals. Thain agreed, Mack said in a statement.

Langone yesterday declined to comment on specifics of any plans after seeking support from Lehman Brothers Holdings and other securities firms.

Thain last week unveiled an agreement to merge the NYSE with Chicago-based Archipelago, an electronic exchange. The proposal doesn’t include shutting the trading floor. NYSE members would swap their seats for 70 percent of shares of what would be a public company. Archipelago shareholders would get the rest. The NYSE is now a not-for-profit corporation.

Based on Archipelago’s closing share price yesterday, members would get about $2.2 million of stock and $300,000 in cash for each seat. That values the exchange at about $3 billion. The Chicago Mercantile Exchange, which is the largest U.S. futures exchange and went public in December 2002, has a market capitalization of $6 billion.

Langone and other members blame Goldman Sachs, the world’s No. 3 securities firm, for not getting more for seat holders. Goldman is an Archipelago shareholder, NYSE seat holder, and is acting as merger adviser to both sides. Goldman has said it negotiated a fair deal.

In his statement yesterday, Mack said he was “encouraged” that Langone’s efforts have helped start talks about “maximizing value for the exchange.” He said “a decision about any further action will follow those evaluations.”

Many members have speculated that Thain, 49, also intends to minimize the floor’s role. Thain sought to allay such concerns April 20, when he said the exchange floor “adds real value,” particularly for small stocks that trade relatively infrequently.