NASDAQ OMX Group Inc held preliminary talks with Carlyle Group LP about going private before the discussions broke down on price, according to a person with direct knowledge of the matter.
The talks were initiated by Carlyle chief financial officer Adena Friedman, who left NASDAQ in 2011 as chief financial officer and head of corporate strategy, said the person, who asked not to be identified because the meetings were private.
NASDAQ surged 3.6 percent to a four-year high of US$30.53 at 1:25pm in New York on Monday. The shares gained as much as 9.1 percent, the biggest intraday advance since August 2011.
“Why NASDAQ sells is because it creates shareholder value,” Rich Repetto, an exchange analyst at Sandler O’Neill & Partners LP in New York, said in a phone interview. “If they could sell it at US$35 or US$40, I think they’d be pretty happy ... If they can sell and create more value than what they think they can by just operating organically, then it’s the board’s duty to look at those options.”
NASDAQ OMX spokesman Rob Madden declined to comment, saying the company does not speak about “rumors or speculation.” Carlyle’s spokesman Randy Whitestone also declined to comment. The talks were reported earlier by Fox Business Network.
NASDAQ chief executive officer Robert Greifeld is reorganizing business units and reducing expenses as revenue from trading shrinks around the world. The exchange is expanding into derivatives, setting up a new London-based market and buying a 25 percent stake in a Dutch alternative trading system focused on stocks and equity derivatives.
The company reported fourth-quarter earnings that beat analysts’ estimates on Jan. 31 after cutting costs. Profit in the three months ended Dec. 31 jumped to US$85 million, or US$0.50 a share, from US$82 million, or US$0.45, in the fourth quarter of 2011.