Exchange Wars! Nasdaq OMX Offers Rival Bid for NYSE

By Shira Ovide

Nasdaq OMX is trying to bust up a takeover of fellow stock exchange NYSE Euronext.

Nasdaq, with the aid of Atlanta’s IntercontinentalExchange, just lobbed an $11.3 billion offer for NYSE Euronext. The bid, valued at $42.50 in cash and stock, is the long-awaited rival offer for the parent company of the New York Stock Exchange.

NYSE already has agreed to a $35-a-share takeover deal from Germany’s Deutsche Börse, a deal that has sparked nationalistic hand wringing on both sides of the Atlantic.

Nasdaq, of course, thinks its offer is far superior. It is a complex one to evaluate for NYSE shareholders, though. The rival bid offers NYSE stockholders a per-share value of $14.24 in cash, 0.4069 share of Nasdaq OMX common stock and 0.1436 share of ICE common stock. That’s no clean cash-and-carry deal.

NYSE shares are soaring in premarket trading, up nearly 12% to $39.34. The stock price had been trading above the value of the Deutsche Börse takeover offer–a classic sign that investors were waiting on a rival bid. Credit to Nasdaq OMX CEO Bob Greifeld for performing the magic trick of cementing a complex offer with ICE. Now, the hard part begins: persuading NYSE shareholders, board members, executives, regulators and the coffee cart guys in front of the New York Stock Exchange on the merits of his deal.

As a sop to flag-waving Americans, Nasdaq points out that the combined NasdaqNYSE/EuronextICE would be based in good ol’ New York City, keeping the Big Board HQ in its longtime home. Deutsche Börse had proposed a multiheadquartered combined company, but the main locus of power would be in Europe.

Nasdaq and ICE said they have received “strong support” from Bank of America and Wells Fargo, which the exchanges said would be prepared to arrange financing for the NYSE takeover.

Our colleague Aaron Lucchetti has reported on the personal dislike between Nasdaq OMX CEO Bob Greifeld and his counterpart at NYSE, Duncan Niederauer, who is slated to run the combined Deutsche Börse-NYSE. Deal Journal couldn’t help but think this bullet point from the Nasdaq/ICE news release is a direct shot at Niederauer:

The Nasdaq/ICE offer, the news release says, “Offers greater long-term value for stockholders by putting existing businesses under managements recognized for integration capabilities and efficiency.”