Nasdaq, ICE sweeten bid for NYSE Euronext

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NASDAQ OMX and IntercontinentalExchange did not alter the terms of their April 1 cash-and-stock offer that had been rejected by NYSE Euronext as it pursues an agreed merger with Germany's Deutsche Boerse.

But the spurned suitors said in a statement they have taken a series of steps "demonstrating their commitment to pursuing their superior proposal with NYSE Euronext and providing greater certainty to the NYSE Euronext Board."

A key measure is the addition of a $350-million "reverse break-up fee" which NYSE Euronext would receive if the proposal fails to win required antitrust or competition approvals.

The exchange operators also announced they had secured committed financing of $3.8 billion to fund the buyout.

Their bid values NYSE Euronext at $42.67 per share as of Monday's market close, they said, a 21 per cent premium over Deutsche Boerse's rival bid valued at $35.29 per share.

"The NASDAQ OMX/ICE proposal remains superior by a significant and inescapable margin," the companies said.

The proposed acquisition of markets in New York, Brussels, Paris, Amsterdam and Lisbon would keep Wall Street's fabled exchange under US ownership.

If the bid is successful, NYSE Euronext would be broken up, with its Liffe derivatives business going to ICE while NASDAQ OMX -- best known for trading the world's leading technology firms -- would take control of the stock markets in New York, Paris, Brussels, Amsterdam and Lisbon.

The bid is also a play to US nationalist sentiment, after the Deutsche Boerse move sparked complaints that the New York Stock Exchange, an icon of American capitalist might known to television viewers around the world for its hectic trading floor, would come under the control of foreigners.

"The combined company would incorporate the iconic NYSE name and floor and strengthen investor confidence in US equity markets, which have been shaken by fragmentation," NASDAQ OMX and ICE said.

"In addition, NYSE Euronext stockholders will benefit from the transaction?s cash component as well as a meaningful participation in a newly combined ICE/Liffe derivatives business that will preserve competition in the European Union."

Robert Greifeld, chief executive of NASDAQ OMX, said the moves should "eliminate any concerns that the NYSE Euronext Board has about engaging in discussions with us."

"It's time to allow a reasonable and expeditious diligence process to begin."

NYSE Euronext acknowledged it had received the merger proposal which the board will review "in due course."

Deutsche Boerse declined to comment.

Deutsche Boerse and NYSE Euronext announced February 15 they would merge to create the world's biggest exchange by revenues and a major player in derivatives trading across two continents.

While both parties emphasized a merger of equals, the combined Netherlands-incorporated firm would be owned 60 per cent by existing Deutsche Boerse shareholders and 40 per cent by NYSE Euronext shareholders, and the German company would dominate the new board.