Monday, May 16, 2011

Nasdaq, ICE withdraw NYSE bid, cite regulators

NEW YORK: Shares of NYSE Euronext Inc. tumbled 10% in early trade on Monday, May 16 after rivals NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. withdrew their hostile $11 billion bid for rival NYSE Euronext on Monday, May 16 saying it became clear they would not win U.S. antitrust approval.

NYSE Euronext shares traded down 10.4% to $36.64, compared to the roughly $37.60 on offer from the Deutsche Boerse. Each NYSE share could be swapped for 0.47 shares of Deutsche Boerse under terms of their merger pact. U.S. traded Deutsche Boerse shares climbed nearly 5% on the end of the bidding war, according to MarketWatch.

Meanwhile, Reuters reported the withdrawal of the offer removes one major hurdle to NYSE Euronext's plans to sell itself to Deutsche Boerse AG for $10.2 billion.

That deal must still win regulatory and shareholder approval in Europe and the United States.

"To me, it's a clear signal that Deutsche Boerse's offer will go ahead," said fund manager Juergen Meyer of SEB Asset Management, which owns Deutsche Boerse shares. "That's what I'm expecting, actually."

Other deals in a global exchanges consolidation frenzy have also run into trouble over nationalistic or regulatory concerns.

In a statement, Nasdaq CEO Bob Greifeld said his company was "surprised and disappointed" with the decision by U.S. Justice Department antitrust regulators.

Greifeld said it became clear that regulators would not give the go-ahead for a deal despite Nasdaq and ICE offering a variety of remedies to address antitrust concerns.

Combining Nasdaq and the NYSE would have brought the top two U.S. stock exchanges together with a virtual monopoly on listings and dominance in trading U.S. cash equities and options.

The withdrawal of the bid leaves Nasdaq searching for its next move. It could look at deals with other exchanges such as Singapore Exchange or London Stock Exchange Group.

Singapore Exchange last month had to abandon its deal with Australia's main exchange after it was rejected on nationalistic grounds.

LSE's bid to buy TMX Group hit rough waters over the weekend after a group of Canadian banks and pension funds came up with a counter proposal for the Ontario-based exchange operator.

Nasdaq and ICE first offered to buy the New York Stock Exchange's parent on April 1, seeking to thwart NYSE Euronext's friendly deal with Deutsche Boerse, announced in February.

Nasdaq and ICE's competing offer would have split NYSE Euronext in two: Nasdaq would have acquired NYSE's equities and equities options business, and ICE would have bought its London-based futures unit, Liffe.

NYSE's board twice rejected the unsolicited offer, and Nasdaq said earlier this month that it and ICE would go directly to NYSE shareholders with a hostile bid.

NYSE Chief Executive Duncan Niederauer refused to talk to Nasdaq and ICE about their offer, but some NYSE shareholders thought he should.

NYSE acknowledged the withdrawal of the Nasdaq/ICE proposal on Monday. Deutsche Boerse also acknowledged Nasdaq's decision and said it would "continue with the NYSE Euronext deal process." - Reuters


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