NYSE Euronext directors rejected as too risky and lacking in value a sweetened takeover offer from NASDAQ OMX Group and IntercontinentalExchange (ICE), the second time in 11 days that the board has chosen instead to back a lower bid from Germany’s Deutsche Boerse AG.
This week’s revised bid “is substantially the same as what was previously rejected,” NYSE Euro-next chairman Jan-Michiel Hessels said in a statement.
In similar language to the board’s first rejection on April 10, Hessels said the new offer “does not provide compelling value, has unacceptable execution risk and is therefore not in the best interests of NYSE Euronext shareholders.”
Though the decision was expected, it could further pave the way for a bidding war, and it reinforces the need for NASDAQ and ICE to convince NYSE shareholders that their proposal can survive a tough US antitrust review.
Hours after the board’s decision, NASDAQ and ICE issued a statement repeating that their bid was superior and that they would continue discussions with shareholders.
“NASDAQ OMX and ICE have directly met each of the specific concerns initially raised by NYSE Euronext’s board and their response is now vague generalities unsupported by the actual facts,” the exchanges said.
The NYSE board reaffirmed its support for a friendly US$9.8 billion takeover offer from Deutsche Boerse. Though it is 14 percent lower than the unsolicited US$11.2 billion offer from NASDAQ and ICE, NYSE Euronext argues it fits with the company’s strategy to grow internationally with more diverse revenues.
NASDAQ and ICE bid for the New York Stock Exchange parent company on April 1.
On Tuesday, they promised to pay NYSE Euronext US$350 million if regulators blocked a merger — a pledge meant to ease the board’s antitrust worries and draw them to the negotiating table.
The pair — which were left out of a wave of global merger plans among exchanges earlier this year — said they secured committed financing for the deal from banks, and said antitrust regulators would start a review soon.
NYSE shareholders are set to meet on Thursday for their annual vote on the company’s directors.
“The way the vote goes will be a modest referendum on how the shareholders feel about the board’s decisions,” Sandler O’Neil analyst Richard Repetto said.
The shareholders will likely vote on the Deutsche Boerse tie-up in July.
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