Nasdaq OMX, ICE put in rival bid for NYSE Euronext
02 Apr 2011
Nasdaq OMX and the Intercontinental Exchange (ICE) yesterday revealed plans to acquire NYSE Euronext in a bid to pip rival Deutsche Borse's merger plan for the NYSE stakes.
Their proposal values the exchange at $42.50 in cash and stock per NYSE Euronext share, or about $11.3 billion, based on the respective Nasdaq OMX and ICE closing share prices on Thursday. According to analysts, this works out to some $1 billion up on the $35-a-share value of the Deutsche Borse plan.
The bid comprising $14.24 in cash plus 0.4059 Nasdaq shares and 0.1436 ICE shares for each NYSE share, comes weeks following NYSE agreeing to Deutsche Borse's $10.2 billion bid and values NYSE shares at $42.5 apiece.
The battle for NYSE comes as the latest development in an industry-wide consolidation drive which earlier saw the London Stock Exchange make an offer for Canada's TMX. If successful, the joint bid would see ICE take control of NYSE's derivatives business. Nasdaq on its part would take over the rest of the company, including NYSE Euronext exchanges in New York, Paris, Brussels, Amsterdam and Lisbon. The US options business would also come under its fold.
According to Robert Greifeld, Nasdaq OMX CEO, the combination would make US markets more attractive. "During the last five years, more than 90 per cent of the top 100 global listings chose not to list in the US, depriving US investors of the opportunity to easily invest and trade in these companies," he said. "The combination of the two leading US exchanges delivers an opportunity to build a global exchange platform that has the scale and growth potential to benefit investors, issues and other market participants."
Meanwhile, Deutsche Borse said its plan offered the best value for its own and NYSE shareholders. Both bids would come under scrutiny in the US and Europe. EU's antitrust chief, Joaquin Almunia has already said that the German plan was likely to require a "deep investigation".
According to analysts, it would be difficult for the German group to beat the new bid. They said the move represented a bold move from Nasdaq and ICE. They say the offer comes with a high premium and it was difficult to see what Deutshe Borse would do about it given the fact that when their deal was announced, it was felt they were giving too much away.
