NASDAQ OMX and Intercontinental Exchange (ICE) are planning to take their takeover bid for NYSE Euronext straight to the Big Board’s shareholders, as they ramp up attempts to corner the company into talks.
Nasdaq and ICE have said they will launch a tender offer for NYSE’s shares later this month. It comes after NYSE’s board twice rejected the $11bn (£6.7bn) unsolicited offer in favour of its $10.2bn deal with Deutsche Boerse.
Nasdaq and ICE’s move to go hostile could force NYSE to the negotiating table or to fight back with defensive measures if shareholders step up pressure. It could also pressure Deutsche Boerse into sweetening its deal.
But it is unlikely to be the last word in what is likely to be a lengthy takeover battle.
NYSE could still sit tight. The gap between Nasdaq-ICE and Deutsche Boerse bids – a key shareholder concern – has narrowed to eight per cent from nearly 20 per cent recently, thanks in part to a weaker US dollar.
The Nasdaq-ICE exchange offer also has conditions that could yet derail it.
“We believe the laundry list of conditions attached to the offer virtually guarantee that it will never be executed,” said Patrick O’Shaughnessy, an analyst at Raymond James.
“The conditions to the tender offer essentially state that Nasdaq/ICE’s proposal must first be approved by the NYSE board, so this offer does not seem to be hostile at all.”
Shareholders of the New York Stock Exchange parent have nonetheless urged it to at least talk to Nasdaq and ICE about their deal.
“I am bothered that NYSE has avoided any conversation with Nasdaq. I feel as if they are biased to the Deutsche offer even though economically it’s not equal,” said Keith Wirtz, investment chief at Fifth Third Asset Management, which holds more than 100,000 shares of NYSE Euronext.
“The proposals on the table are not likely to be the last,” Wirtz said. “I really think the German company is going to be forced to react to the actions of Nasdaq.”
City A.M. Reporter