NASDAQ OMX Group, Inc and IntercontinentalExchange Inc (ICE) on Monday declared a hostile takeover bid for NYSE Euronext Inc, which has twice rejected their offers in favor of a tie-up with Germany’s Deutsche Boerse AG.
NASDAQ and ICE said in a joint statement that each of their respective boards of directors had approved a cash-and-stock offer to buy all of the outstanding shares of NYSE Euronext for about US$11 billion.
The two companies said they would take the offer directly to the shareholders of NYSE Euronext, after the New York Stock Exchange-led company turned down earlier offers at the level of the board of directors.
“The board of NYSE Euronext has twice rejected our superior proposal without meeting with us, despite the fact that their existing merger agreement with the Deutsche Boerse allows them to talk with us,” ICE chairman and chief executive Jeffrey Sprecher said in the statement.
“While we are hopeful that the board will decide to consider this transaction, we are taking our proposal to NYSE Euronext stockholders upon the commencement of this exchange offer to provide the opportunity to consider our proposal directly,” he added.
NASDAQ OMX and ICE first approached NYSE Euronext on April 1 with the cash-and-stock offer and then sweetened their bid on April 19 by offering to a US$350 million “break-up fee” if the deal failed to meet regulatory muster.
The exchange operators also announced they had secured committed financing of US$3.8 billion to fund the buyout of the transatlantic markets operator.
Both times NYSE Euronext spurned their offer as it pursued an already-agreed merger with Deutsche Boerse.
In a statement, NYSE Euronext acknowledged the bidders’ “intention to begin an unsolicited exchange offer some time in May to acquire all outstanding shares of NYSE Euronext.”
The terms of their offer were unchanged from a previous proposal that was “unanimously rejected” by the board, the takeover target noted.
Under the terms of the NASDAQ-ICE offer, each share of NYSE Euronext would be exchanged for US$14.24 in cash, 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock.
The companies said that if they are successful in acquiring the outstanding shares, they would “consummate a second-step merger as soon as possible thereafter to acquire the remaining NYSE Euronext shares for the same consideration per share.”
“The NYSE Euronext board has continually challenged the seriousness of our proposal and refused to engage us in discussion despite the positive feedback we have received from their stockholders,” NASDAQ CEO Bob Greifeld said in the statement.
“The commencement of this exchange offer should convince the NYSE Euronext board of the seriousness of our intentions. We continue to welcome the opportunity to enter into meaningful discussion with the NYSE Euronext board in order to achieve a transaction that is in the best interests of their stockholders,” he added.
Their 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.