NASDAQ Makes $11.3 Billion Hostile Offer To Buy The NYSE

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This has been rumoured for a while now, and now it’s official.

NASDAQ has made an offer to buy the NYSE.

The offers would value the NYSE — which previously had announced merge plans with the Deutsche Boerse — at $42.50 per share. That’s a 19% premium over the current offer.

In the announcement, NASDAQ makes two telling points right up front. This is very much about derivatives.

  • Creates a leading global exchange in equities, options, listings and exchange related technology to compete in the increasingly competitive global exchange market
  • Establishes a leading transatlantic derivatives platform that would promote continued competition in Europe and the U.S.

Shares of NYSE are currently up 11%.

Assuming NASDAQ can break up the Deutsche Boerse deal, there’s a $339 million breakup fee.

From the announcement:

NASDAQ OMX and IntercontinentalExchange today announced that they have made a joint proposal to acquire NYSE Euronext for $42.50 in cash and stock per NYSE Euronext share, or approximately $11.3 billion, based on the respective NASDAQ OMX and ICE closing share prices as of March 31, 2011.  The proposal, delivered today in a letter to the Board of Directors of NYSE Euronext, represents a 19 per cent premium over the price proposed by Deutsche Boerse, based on Deutsche Boerse’s closing share price as of March 31, 2011, and a 27 per cent premium over NYSE Euronext’s unaffected stock price on February 8, 2011, the day prior to NYSE Euronext’s statement that they were in discussions with Deutsche Boerse regarding a transaction.

Under the terms of the proposed acquisition, NYSE Euronext stockholders would receive $14.24 in cash, plus 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock for each NYSE Euronext share. 

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