Nasdaq, ICE bid to buy New York Stock Exchange

Moving to secure their own futures as exchanges around the world consolidate, Nasdaq and the Intercontinental Exchange offered NYSE shareholders 19 percent more per share than a rival bid from Deutsche Boerse.

The deal would would see markets in Brussels, Paris, Amsterdam, Lisbon and New York change hands, while keeping Wall Street\'s fabled exchange under US ownership.

The $42.50 per share cash-and-stock bid for NYSE "represents a superior proposal to the Deutsche Boerse takeover proposal," Nasdaq and ICE said in a joint statement.

Their bid "offers greater long-term value for stockholders by putting existing businesses under managements recognized for integration capabilities and efficiency."

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 its stock markets in New York, Paris, Brussels, Amsterdam and Lisbon.

The bid is also a play to US nationalist sentiment, after the Deutsche Boerse move sparked complaints that the NYSE big Board, an icon of American capitalist might known to television viewers around the world for its hectic trading floor, would come under control of foreigners.

"A unified US equities market would ensure that the US is better able to compete globally in a rapidly changing international market for equity trading and capital-raising," said the Nasdaq and ICE announcement.

Deutsche Boerse and NYSE Euronext announced February 15 that they would merge to create the world\'s biggest exchange by revenues.

While both parties emphasized a merger of equals, the new, Netherlands-incorporated firm would be owned 60 percent by existing Deutsche Boerse shareholders and 40 percent by NYSE Euronext shareholders, and the German side would dominate the new board.

Nasdaq chief executive Robert Greifeld emphasized that their deal would better benefit American investors.

"During the last five years more than 90 percent of the top 100 global listings chose not to list in the US, depriving US investors of the opportunity to easily invest and trade in these companies," he said in a statement.

"The combination of the two leading US exchanges delivers an opportunity to build a global exchange platform that has the scale and growth potential to benefit investors, issuers and other market participants."

ICE chief executive Jeffrey Sprecher, chairman and chief executive officer emphasized that their takeover of the Liffe platform would create more competition in the hot business of interest rate futures.

That market, he said, is currently dominated "by one exchange with approximately 95 percent market share," a reference to Chicago\'s CME exchange.

In a statement NYSE said it had received the Nasdaq and ICE "unsolicited proposal" and would "carefully review" it.

Deutsche Boerse said it "continues to strongly believe that the envisaged merger of Deutsche Boerse AG and NYSE Euronext is the best possible combination for both shareholder groups and the stakeholders of the companies."

The deal proposed Friday would build ICE\'s presence in the lucrative derivatives markets, while creating a near-monopoly powerhouse in US equities.

Indeed, the tie-up between long-time rivals NYSE and Nasdaq could draw anti-trust challenges, according to analysts.

"It is impossible to not think that... (a) NYSE-Nasdaq-ICE exchange will have extreme power over market participants," said Jon Ogg, an analyst at 24/7 Wall Street.

"The exchanges claim that there are very few barriers to entry and that new private and semi-private exchanges take away the business all the time. From an outsider\'s view that is not as clear."

The deal would also keep the new entity focused on US business in an age of diversified global trading.

"The Deutsche Boerse deal ... seems to offer a true \'globalization\' of both equity & derivative markets," said Kenneth Polcari of ICAP, whereas Nasdaq\'s approach will leave many "wondering where the true benefits will come from and what the new landscape may look like."

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