THE DIRECTORS of NYSE Euronext have snubbed a rival merger bid from Nasdaq OMX Group, giving rise to the possibility of a hostile takeover attempt.
The firm said it still firmly backs an offer from Deutsche Boerse, saying the joint Nasdaq / InterContinental Exchange offer carried significant execution risk and was less likely to close.
The board of directors also raised concerns about the level of debt involved in the merger proposal.
The bid proposed a radical restructuring of the exchange, which would see Intercontinental Exchange snap up NYSE’s European assets.
NYSE Euronext chairman Jan-Michiel Hessels said: “Breaking up NYSE Euronext, burdening the pieces with high levels of debt, and destroying its invaluable human capital, would be a strategic mistake in terms of where the global markets are going, and is clearly not in the best interests of our shareholders.
“The highly conditional break-up proposal from Nasdaq / ICE would also require shareholders to shoulder unacceptable execution risk.
“We are confident that the combination with Deutsche Boerse will create compelling value for our shareholders.”
The outright rejection of the bid – understood to be 16 per cent higher than the Deutsche Boerse offer – is likely to anger some NYSE Euronext shareholders, who will question whether it has been thoroughly considered.
Frankfurt-based Deutsche Boerse has agreed to acquire the NYSE owner in a stock bid worth $9.5bn (£6.8bn). The combined entity would be the world’s largest exchange. It is the latest development in a wave of consolidation sweeping through the world’s exchange markets.