Nasdaq, ICE unveil $11.1-bn bid for NYSE Euronext

The Nasdaq OMX Group and the Intercontinental Exchange (ICE) disclosed the full terms of their unsolicited $11.1 billion takeover bid for New York Stock Exchange Euronext on Tuesday, including a breakup fee, in their strongest effort yet to win over shareholders in the operator of the Big Board.

The proposed 67-page merger agreement released by Nasdaq and ICE is meant to counter NYSE Euronext’s concerns about their earlier proposal, which was rejected for being “loosely worded” and “highly conditional.”

NYSE Euronext has said that it remains committed to its $9.3 billion all-stock merger with Deutsche Börse. Its board, which is expected to discuss the offer on Thursday, still appears skeptical about the prospects for a Nasdaq-ICE bid.

The company’s shareholders are expected to vote on that deal in July, and the stock market operator must win over a majority of them to gain approval.

At Tuesday’s closing prices, the offer by Nasdaq and ICE is worth about $42.53 a share, while the Deutsche Börse proposal is worth about $35.56 a share.

Chief among the new details in the Nasdaq-ICE proposal is a $350 million breakup fee that would be paid to NYSE Euronext if the takeover bid did not win antitrust approval. That fee is roughly comparable to the $357 million breakup fee specified in NYSE Euronext’s agreement with Deutsche Börse — which Nasdaq and ICE also agreed to reimburse. Nasdaq and ICE said they also plan to start the process for antitrust approval by buying $66 million worth of NYSE Euronext shares. The two bidders have already held preliminary talks with the Justice Department.

NYSE Euronext has argued the proposal, in which Nasdaq would take over the company’s stock-trading business and ICE would buy its derivatives platform, would not survive regulatory scrutiny.

Nasdaq and ICE also said their lenders, including Bank of America, UBS, Wells Fargo and two Nordic banks, have officially committed to providing the $3.8 billion in financing needed to support their bid. Those banks have agreed to make the financing available for a year, according to people briefed on the matter who were not authorised to speak publicly.

Together, the newly disclosed provisions are an effort to entice NYSE Euronext to begin negotiations with Nasdaq and ICE.

“We’ve come a long way to addressing what they spoke about in their letter,” Robert Greifeld, Nasdaq’s chief executive, said in a telephone interview, referring to NYSE Euronext’s board. “They’re running out of reasons not to engage with us.”

Greifeld said he was optimistic that the NYSE Euronext directors would at least meet with Nasdaq and ICE. But if they do not, he suggested that Nasdaq and ICE would consider other strategies — which analysts say could include beginning a tender offer for NYSE Euronext shares.

©2011 The New York
Times News Service