Nasdaq OMX poised to win London Stock Exchange in failure to grab NYSE

Nasdaq OMX Group Inc’s failure to acquire NYSE Euronext is giving Robert Greifeld an opportunity to succeed at buying the exchange he’s always wanted — at a discount of almost 30 per cent.

Greifeld, Nasdaq OMX’s 53-year-old chief executive officer, and IntercontinentalExchange Inc yesterday dropped their $11.3 billion bid for the operator of the New York Stock Exchange after US regulators threatened to block the deal. The decision spurred a 6.8 per cent jump in London Stock Exchange Group Plc, which Nasdaq OMX has tried to acquire three times, and came one day after LSE’s own offer for Canada’s largest bourse was trumped by a group of local banks and funds.

While NYSE Euronext’s Duncan Niederauer can cement his own deal to sell the 219-year-old company to Deutsche Boerse AG and emerge as head of the world’s largest exchange, Greifeld risks being left out of the industry’s biggest round of consolidation. Buying LSE now would be cheaper after the London-based exchange lost $1.4 billion in value since Nasdaq OMX’s hostile bid failed in February 2007. LSE closed at 884 pence a share yesterday, 29 per cent less than the New York-based exchange’s prior offer of 1,243 pence a share, according to data compiled by Bloomberg.

“Greifeld has to do something clearly,” said Niki Beattie, CEO of Market Structure Partners Ltd, a London-based consulting firm that advises brokers and exchanges. “It makes sense. He’s had a look at LSE before and it would cost him less possibly to do it now. Everything was looking pretty bad for him and now actually it looks a bit easier. I’m convinced he will explore a deal with LSE.”

Frank De Maria, a spokesman at Nasdaq OMX, and LSE’s Victoria Brough didn’t return e-mails seeking comment.

Greifeld was counting on a plan to merge Nasdaq OMX’s stock-trading and listings operations with New York-based NYSE Euronext to eliminate costs in businesses where competition has cut its profit and market share. Nasdaq OMX would have gained a monopoly on corporate listings.

The April 1 bid from Nasdaq OMX and ICE of Atlanta for New York-based NYSE Euronext was part of more than $30 billion in takeover offers for exchanges in less than six months.

The deals began in October, when Singapore Exchange Ltd bid A$8.35 billion ($8.3 billion) for ASX Ltd of Sydney. LSE, run by Xavier Rolet, 51, agreed to buy TMX for about $3.1 billion on February 9, and Frankfurt-based Deutsche Boerse followed less than a week later with its takeover of NYSE Euronext. Singapore Exchange’s acquisition of ASX was rejected by Australia’s government last month.

US regulators needed 45 days to block Nasdaq OMX and ICE from acquiring NYSE Euronext. The US Justice Department cited concern about the potential for monopolies in stock listings, data services and areas of trading in rejecting the offer.