NY Stock Exchange Rejects Nasdaq/ICE Bid

Exchange goes forward with plan to combine with German firm.

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    NEWSLETTERS

    AP
    NY Stock Exchange rebuffs new offer from Nasdaq/ICE

    Nasdaq and IntercontinentalExchange said their $11.3 billion bid for NYSE Euronext was rejected without any talks with the exchanges.

    Nasdaq OMX Group Inc. CEO Robert Greifeld said in a statement late Sunday that feedback from NYSE Euronext shareholders was positive, and that the companies had expected NYSE Euronext would meet with them to discuss the merits of their proposal.

    NYSE Euronext said earlier Sunday that its board decided to turn down the offer, which was submitted earlier this month, because it was "highly conditional" and would have caused unnecessary risk for shareholders.

    Instead NYSE Euronext, parent of the New York Stock Exchange, is sticking with its plan to combine with German exchange operator Deutsche Boerse AG in a $10 billion deal.

    Shares of NYSE Euronext fell 20 cents to $38.50 in premarket trading on Monday.

    The rejection of the Nasdaq/ICE bid was expected. Analysts have said that a deal between the companies would have led to more job losses. They also worried that a combination would raise antitrust concerns in Washington if Nasdaq and NYSE created one big U.S. stock market exchange.

    But Nasdaq and Intercontinental Exchange Inc. say their bid is "clearly superior" and called the Deutsche Boerse proposal "indisputably financially inferior."

    ICE Chairman and CEO Jeffrey Sprecher said in a statement that by declining to meet with Nasdaq and ICE, the NYSE's board was ignoring its obligation to its stockholders. "I would expect that NYSE Euronext's stockholders will make their displeasure known to the board," he said.

    Sprecher said the two companies "will continue meeting with investors, customers and regulators to highlight the many ways in which our proposal is superior, not only for the stockholders of NYSE Euronext, but also for market participants in the U.S. and Europe which would benefit from a more efficient and competitive marketplace."


    Nasdaq and ICE said Bank of America and Wells Fargo are prepared to arrange the financing for its offer.

    Under its proposal, Nasdaq said it would take over the NYSE's stock trading and options business, while IntercontinentalExchange would get its derivatives market. ICE trades commodities including oil, sugar, coffee and cotton. It's also a market for derivatives such as credit default swaps that are used by traders and investors to offset risk in other investments.

    The proposed merger of Deutsche Boerse and NYSE Euronext would create the world's largest stock exchange operator. The company would be incorporated in the Netherlands, although it would have headquarters in New York and Frankfurt. NYSE chief executive Duncan L. Niederauer would be expected to become CEO of the combined company, while Deutsche Boerse' CEO Reto Francioni would be chairman.

    Stock exchanges have turned to mergers as the trading of stocks, options and other investments has become increasingly competitive. Technology has driven down the costs of trading, and newer companies like BATS Exchange and Direct Edge have taken away business from established players like NYSE and Nasdaq. That's forced them to look for deals to ensure their survival.