Thu, Feb 24, 2011 - Page 10 News List

NASDAQ trying to avoid being left out in the cold

MERGERS:NASDAQ is looking at several options as other exchanges merge. The options include joining with ICE or CME to bid for NYSE

Reuters, NEW YORK

NASDAQ OMX Group Inc, left out of a global merger frenzy among exchanges, is exploring options that include teaming up with a partner on a rival bid for NYSE Euronext, a person familiar with the situation said on Tuesday.

The alternatives include the possibility of tying up with IntercontinentalExchange Inc (ICE) or CME Group Inc to wrest NYSE Euronext out of its deal with Deutsche Boerse, the person said.

NASDAQ may also consider selling itself or buying another competitor if it is unable to compete with Deutsche Boerse on the NYSE deal, the Wall Street Journal said.

A NASDAQ spokesman was not immediately available to comment. The person familiar with the situation asked to remain anonymous because the talks are private.

NASDAQ has found itself to be the odd-man out in a series of exchange-operator deals in recent months. Pressure is mounting on global bourses to seek partnerships to cut costs and counter the threat from bigger rivals and alternative trading platforms.

In recent weeks, Deutsche Boerse agreed to buy NYSE, the London Stock Exchange Group Plc announced a deal to take over Canadian stock market operator TMX Group Inc, and BATS Global Markets said it would buy peer Chi-X Europe.

Last October, Singapore Exchange agreed to buy Australia’s ASX.

It is not clear where NASDAQ’s efforts will lead, the person familiar said. Indeed, officials at both ICE and CME have been cautious about potential deals.

Earlier this month ICE chief financial officer Scott Hill said his exchange, which trades energy futures as well as over-the-counter swaps, sees “a lot of opportunity in the changes that are going on.”

However, he said ICE is “proceeding cautiously on the M&A side, because what we don’t want to do is we don’t want to acquire to build scale.”

Officials at CME, which owns the Chicago Mercantile Exchange, have said they are not planning any large acquisitions and have promised to return excess cash to investors in the form of dividends or share buybacks.

The New York Times’ Dealbook last week said NASDAQ and IntercontinentalExchange were in talks to team up on a possible bid for NYSE Euronext.

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