After weeks of speculation, Nasdaq OMX has formally teamed up with IntercontinentalExchange to try and top Deutsche Borse’s takeover bid for NYSE Euronext.
Nasdaq OMX and ICE have offered $11.3 billion while the Deutsche Borse, the owner of the Frankfurt stock exchange, wants to buy NYSE Euronext for about $10 billion.
The Nasdaq-ICE offer needs the approval of a majority of Nasdaq OMX and ICE shareholders as well as a majority of NYSE Euronext’s shareholders.
Nasdaq-ICE’s joint bid of $42.50 in cash and stock for the NYSE was not a complete surprise, as reports surfaced last month that Nasdaq OMX, parent of the Nasdaq Stock Market, would make a competing offer.
The proposed transaction would give NYSE Euronext stockholders $14.24 in cash and 0.4069 shares of Nasdaq OMX stock and 0.1436 shares of ICE stock for each share of NYSE Euronext. The NYSE and Euronext merged in 2007.
Nasdaq OMX said its bid represents a 19 percent premium over the price proposed by Deutsche Boerse, based on Deutsche Boerse's closing share price as of March 31, 2011, and a 27 percent premium over NYSE Euronext's stock price on February 8, 2011, the day before NYSE Euronext said it was in discussions with Deutsche Boerse.
Under the terms of the joint Nasdaq-ICE proposal, the Atlanta-based ICE would acquire NYSE Euronext’s derivatives businesses while Nasdaq would keep NYSE Euronext’s remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the U.S. options business.
Nasdaq OMX and ICE said they will finance the cash portion of the acquisition through cash on hand and a $3.8 billion financing commitment.
The battle over NYSE Euronext comes amidst plenty of takeover activity in the exchange market. In February, the London Stock Exchange and TMX Group, parent of the Toronto Stock Exchange, announced a $2.9 billion merger.
In a statement, Robert Greifeld, chief executive of Nasdaq OMX, said that if the Nasdaq-ICE offer were completed it would “would increase transparency and liquidity in U.S. markets and create jobs as new companies raise capital.”