NYSE shuns second offer from Nasdaq and ICE

By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- The New York Stock Exchange rejected an attempt by rival exchanges to sweeten a recent buyout proposal, saying it remains committed to a planned merger with Germany's Deutsche Boerse.

NYSE Euronext said the modified offer by Nasdaq OMX Group and IntercontinentalExchange was "substantially the same" as the $11.3 billion offer the exchanges made earlier this month.

"This proposal does not provide compelling value, has unacceptable execution risk and is therefore not in the best interests of NYSE Euronext shareholders," the company's chairman, Jan-Michiel Hessels, said in a brief statement.

NYSE Euronext also reaffirmed its plan to merge with Germany's Deutsche Boerse. The $10 billion deal, which would create the world's largest exchange for stocks and derivatives, was announced in February.

"The combined company will be a global leader across all major asset classes, with the financial strength, balance sheet flexibility and synergy potential to drive revenue and earnings growth and new product innovation," said Hessels, referring to the planned merger with Deutsche Boerse.

Nasdaq and ICE have proposed splitting up NYSE Euronext, with Nasdaq taking over the stock exchanges, including the New York Stock Exchange and markets in Europe. ICE, meanwhile, would buy its derivatives business.

To sweeten the deal, the companies added a $350 million "reverse termination fee" to the terms of their offer on Tuesday.

In a joint statement issued Thursday, Nasdaq and ICE maintained that they have presented a "superior offer" and called on NYSE Euronext's board to meet and discuss the deal.

"Continually refusing to engage is starting to appear as if they are protecting their deal rather than acting in the best interest of their shareholders," said Nasdaq CEO Robert Greifeld. "We will not be deterred by the Board's attempts to protect an inferior transaction."

Based on closing share prices Wednesday, Nasdaq and ICE said their offer represents a premium of 15%, or $1.4 billion, over the value offered under the existing agreement with Deutsche Boerse.

The development is part of what has been a wave of recent consolidation, as exchanges around the world look for ways to reduce transaction costs and increase exposure to the more lucrative derivatives, options and futures markets.

Earlier this year, the London Stock Exchange announced a merger with Canada's TMX Group, the owner of the Toronto Stock Exchange; the two Russian exchanges -- MICEX and RTS -- hooked up; and late last year, Singapore offered to buy out the Australian Securities Exchange for $7.8 billion.  To top of page

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