Nasdaq OMX, ICE announce $11-bn exchange offer for NYSE Euronext

Nasdaq OMX and IntercontinentalExchange approved a direct offer to acquire NYSE Euronext, formalising their hostile bid for the biggest US market operator and taking it to shareholders.

The exchange offer, designed to circumvent NYSE Euronext directors who have twice rejected the proposal, carries the same price as the original $11.3 billion bid announced on April 1. The New York Stock Exchange owner has said it is prefers its February merger agreement with Deutsche Boerse, valued about 7.7 per cent below the Nasdaq bid, according to data compiled by Bloomberg as of 4 pm yesterday in New York.

“The NYSE Euronext board has continually challenged the seriousness of our proposal and refused to engage us in discussion despite the positive feedback we have received from their stockholders,” Nasdaq OMX Chief Executive Officer Robert Greifeld said in a statement. “The commencement of this exchange offer should convince the NYSE Euronext board of the seriousness of our intentions.”

While announcing a tender offer for NYSE Euronext shows Nasdaq OMX and ICE’s urgency, it may carry little weight because of rules in the exchange’s governing documents limiting how much outsiders can own. The bylaws, mandated by the Securities and Exchange Commission (SEC), prevent investors from accumulating a 20 per cent stake in the company without the approval of the board.

“If they can get people to tender 13 to 15 per cent of the shares, it may give them a little bit more wind for their sails,” said Stephan Petersen, a Minneapolis-based senior equity analyst at Thrivent Asset Management, which oversees $70 billion.