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A formal merger document that can be presented to the companies' boards is not yet prepared, a separate source familiar with the situation said. Other sources said the NYSE Euronext board is also expected to meet on Sunday, but the details of what it might discuss were unclear.

The two companies declined to comment.

Deutsche Boerse and NYSE Euronext said on Wednesday they were in advanced talks to merge, just hours after London Stock Exchange unveiled a bid for Canadian market operator TMX Group Inc.

Most of the tough decisions, including the composition of a combined Deutsche Boerse-NYSE Euronext board, have been made, but a deal is not done yet, the first source said, adding that the exchanges are working toward an announcement on Tuesday.

Important issues such as the exact exchange ratio and premium for the deal are yet to be decided, the source said.

All the existing brand names will stay in place in a combined company, the source said. The only question on that front is around the name of a new Dutch holding company being contemplated in a merger, and that has not been decided, the source said.

Other exchanges said they were considering striking their own deals or looking to take advantage of the distraction, in early signs of ripples through the world's capital markets.

CBOE Holdings Inc, IntercontinentalExchange Inc, BATS Global Markets and Chi-X Europe all weighed in on Friday on the deals that would see Europeans acquire the New York Stock Exchange and the Toronto Stock Exchange.

"Every exchange that wasn't involved in the two mergers -- the four that were not involved -- had to at lunch on Wednesday be asking themselves, 'Should I be involved in some way?' and calling their bankers and thinking strategically," said Alan Dean, CBOE's chief financial officer.

"It has to be a jolt, I think, for all market participants in this industry," he said at a conference hosted by Credit Suisse.

CBOE, the largest of the U.S. options venues, is seen as a likely takeover target. The other public U.S. operators -- ICE, Nasdaq OMX Group Inc and CME Group Inc -- are mostly larger players with histories of being buyers.

The Deutsche Boerse-NYSE Euronext deal would create the world's largest exchange company and could put pressure on others to keep pace as the companies shift into more profitable derivatives businesses to stave off competition from upstart stock-trading venues.

Jeffrey Sprecher, chief executive of the futures-oriented ICE, said his rivals are attempting to "muscle their way in or acquire their way into the derivatives space," reinforcing the value of that business.

"It bodes very very well for my company to have a lot of these people distracted by with these complicated mergers, these cross-border mergers that are going to involve a lot of regulation and regulatory intervention to get these deals completed," Sprecher told the conference.

The shares closed 3.5 percent higher than the IPO price of $30 at $31.05 on the New York Stock Exchange after the company conducted the largest U.S. energy-related IPO since 1998.

The IPO was seen as a means for Kinder's private equity partners to monetize their investment and an opportunity for investors to gain access to the company's track record of steady cash flows and its vast network of pipelines spanning the United States and stretching for 2,500 miles in Canada.

"It's a yield play," Nick Einhorn, research analyst at Renaissance Capital, said of investor appetite. "It's a high-quality company that still has pretty decent growth."

Backed by private equity investors including Carlyle Group CYL.UL and Goldman Sachs Group Inc's (GS.N) buyout fund, Kinder Morgan upsized its IPO as shareholders sold a 13.5 percent stake in the company.

Houston-based Kinder Morgan raised $2.86 billion on Thursday in an IPO valuing the firm at more than $21 billion.

INSTITUTIONAL INVESTOR APPEAL

Kinder Morgan's offering represented interest in its master limited partnership (MLP), Kinder Morgan Energy Partners LP (KMP.N), which holds most of the company's assets.

Historically, institutional investors have shunned buying into partnerships because of tax complications. But this offering was a way for them to add pipeline and storage assets to their portfolios as MLPs have low tax liability, which also provides them with a lower cost of capital.

"It's a blue-chip from day one," said Francis Gaskins, president of IPODesktop.com. "It's a blue chip that institutions have no problem owning."

The underlying MLP has forecast an increase of about 4.5 percent in its dividend yield this year, which would mean an even bigger yield growth for Kinder Morgan Inc investors, Einhorn said.

The IPO price of $30 per share implied a yield of 3.9 percent based on $1.16 per share in dividends Kinder Morgan said in the filing it would pay annually if it was public for all of 2011, analysts said.

Kinder Morgan's private equity investors and management will retain control of nearly 90 percent of the company.

Chief Executive Officer Rich Kinder, who led the 2007 buyout of the company, is keeping his entire 30.6 percent stake, which leaves him heavily invested in the company's future in contrast with typical private-equity investors' exits from a bought-out company through an IPO.

The CEO previously was president of energy company Enron Corp but left in 1996 -- years before it was enmeshed in an accounting scandal and went bankrupt.

Details of what the NYSE Euronext board might discuss or what it might vote on were unclear. The two companies declined to comment.

Deutsche Boerse and NYSE Euronext said on Wednesday they were in advanced talks to merge, just hours after London Stock Exchange unveiled a bid for Canadian market operator TMX Group Inc.

Other exchanges said they were considering striking their own deals or looking to take advantage of the distraction, in early signs of ripples through the world's capital markets.

CBOE Holdings Inc, IntercontinentalExchange Inc, BATS Global Markets and Chi-X Europe all weighed in on Friday on the deals that would see Europeans acquire the New York Stock Exchange and the Toronto Stock Exchange.

"Every exchange that wasn't involved in the two mergers -- the four that were not involved -- had to at lunch on Wednesday be asking themselves, 'Should I be involved in some way?' and calling their bankers and thinking strategically," said Alan Dean, CBOE's chief financial officer.

"It has to be a jolt I think for all market participants in this industry," he said at a conference hosted by Credit Suisse.

CBOE, the largest of the U.S. options venues, is seen as a likely takeover target. The other public U.S. operators, ICE, Nasdaq OMX Group Inc, and CME Group Inc, are larger players with histories of being buyers.

One of the mergers would create the world's largest exchange company in Deutsche Boerse-NYSE Euronext, and could put pressure others to keep pace as the companies shift into more profitable derivatives businesses to stave off competition from upstart stock-trading venues.

Jeffrey Sprecher, ICE's chief executive, said his rivals are attempting to "muscle their way in or acquire their way into the derivatives space," reinforcing the value of that business.

"I bodes very very well for my company to have a lot of these people distracted by with these complicated mergers, these cross-border mergers that are going to involve a lot of regulation and regulatory intervention to get these deals completed," Sprecher told the conference.

"We feel very opportunistic right now that we're in an excellent position to take advantage of their downturn."

Shares of U.S. exchange operators were little changed Friday afternoon after a roller-coaster week in which NYSE Euronext and Nasdaq OMX soared to multi-year highs. NYSE Euronext shares were off 0.2 percent at $37.74. Deutsche Boerse closed 0.8 percent higher at 61.62 euros.

LAYERS OF COMPETITION

In Europe, trading venues BATS and Chi-X said they extended their merger talks to secure a deal, which has taken on added importance by the Deutsche Boerse-NYSE Euronext talks.

A separate report also suggested stronger consumer activity as the U.S. trade deficit widened slightly more than forecast in December to its highest level in four months.

While consumers were more cheery about the economic and job market recovery, they were less sanguine about the nation's longer-term outlook, according to the latest consumer surveys from Thomson Reuters and the University of Michigan.

The preliminary February reading for the overall index on consumer sentiment came in at 75.1, up from 74.2 in January.

It was the highest level since June 2010 and was roughly in-line with the median forecast of 75 expected by economists polled by Reuters.

"Further proof that the U.S. economy is rebounding at a stronger pace than expected. It's been reflected in virtually all recent data outside of inflation data," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

The survey's barometer of current economic conditions jumped to 86.8, the highest level since January 2008, while the gauge of consumer expectations slipped to 67.6 from January's 69.3.

U.S. Treasuries touched session highs following the data as some worried about the long-term outlook.

A separate survey of forecasters showed the U.S. economy and jobs market are expected to grow more strongly in the first quarter than previously expected.

The Federal Reserve Bank of Philadelphia's survey of 43 professional forecasters sees the economy growing at an annual rate of 3.6 percent in the current quarter, up from the estimate of 2.4 percent three months ago.

Though employment remains one of the biggest challenges for the economy, there have been signs the job market recovery is continuing, if not gaining speed.

With growth picking up, consumers remain concerned about inflation, the University of Michigan surveys showed. One-year inflation expectations were unchanged at 3.4 percent, the highest rate since the fall of 2008. The five-to-10-year inflation outlook also was unchanged at 2.9 percent.

Concerns over inflation have been creeping up lately as commodity prices rise and on jitters that strength in the economy will force the Federal Reserve to hike interest rates sooner than expected. Nonetheless, the Fed is largely viewed as maintaining its accommodative policy for some time.

(Reporting by Leah Schnurr; Additional reporting by Caroline Valetkevitch and Steve Johnson in New York and Doug Palmer in Washington; Editing by Andrea Ricci)