NYSE Euronext Chief Executive Duncan Niederauer on Thursday signalled he would rather walk away than force a deal with Deutsche Boerse as European Union regulators get ready to outline their terms for approving the $9 billion (5 billion pounds) merger.

At some point, the logic of the combination would not hold together if we are asked to give up too much. This is not where we are right now, Niederauer said on a conference call in which he also discussed third-quarter earnings.

He reiterated his confidence in the compelling industrial logic of the merger following a meeting with the European Commission last week to make the case for the deal, which has caused antitrust concerns because of the tight grip such a company would have on exchange-based financial futures trading in Europe.

Another meeting is set for next week as a November 17 deadline approaches for NYSE Euronext and Deutsche Boerse to offer concessions that would ease regulators' concerns, such as opening up businesses to rivals or selling some operations.

The meeting -- which a source said is on Tuesday -- should help the companies determine how to better work with (the regulators) to further narrow and address their remaining concerns, Niederauer said on Thursday.

A key way to measure which remedies are acceptable is to look at whether EU demands put the cost savings promised to shareholders in jeopardy, a person familiar with Deutsche Boerse's thinking said on Thursday.

This in effect means that the companies cannot agree to sell one of the two derivatives exchanges, Eurex or Liffe, because they would no longer be in a position to deliver the synergies, this person said.

Another source close to Deutsche Boerse said the process of discussing possible remedies began this week in anticipation of a state of play meeting with the European Commission and representatives of both Deutsche Boerse and NYSE on November 8.

At this meeting, it will become clear whether arguments brought forward by NYSE and Boerse during the oral hearings in Brussels were heeded by the European Commission, the second source said.

These possible remedies will then be discussed at a Deutsche Boerse board meeting scheduled for the week of November 14, the person added.

Meanwhile, Deutsche Boerse this week began modelling remedy scenarios such as opening up different products for clearing and settlement to third parties, said a third source, who is close to Deutsche Boerse.

Deutsche Boerse's takeover of NYSE Euronext, first announced amid a rush of industry merger plans in February, would create the world's largest exchange operator.

The EU has pledged to make public its final decision on the deal by December 22.

Earlier on Thursday, NYSE Euronext cited strong trading and technology sales for a 54 percent rise in quarterly profit.

A rare bright spot in an otherwise dark quarter for financial firms, exchanges benefited as investors rushed to trade, hedge and speculate in the year's most volatile markets, driven by Europe's sovereign debt crisis and the U.S. credit downgrade and deficit debate.

The company said operating income was up 38 percent for derivatives trading and 54 percent for share trading. Data and systems sales rose 29 percent.

Total revenue increased 20 percent to $1.3 billion, while operating expenses fell 1 percent to $416 million. Profit was $186 million in the third quarter.

Shares of NYSE Euronext were up 1.8 percent at $25.98 in morning trading.

(Reporting By Edward Taylor, Andreas Kroener, Luke Jeffs and Jonathan Spicer; Editing by Maria Sheahan and Helen Massy-Beresford)