NEW YORK CITY-Nasdaq OMX and IntercontinentalExchange on Tuesday rolled out a new, ostensibly more attractive proposal in their unsolicited $11.3-billion bid to acquire NYSE Euronext. The impact of the newly proposed terms on investor sentiment at publicly traded companies, including REITs, remains uncertain.
NYSE Euronext, which is planning a merger with Frankfurt-based Deutsche Boerse, acknowledged receipt of the Nasdaq/ICE offer in a brief statement. The parent company of the New York Stock Exchange says that its board of directors will review the offer expeditiously, “consistent with its fiduciary duties and its obligations under its previously announced business combination agreement with Deutsche Boerse AG.”
Under Tuesday’s terms, Nadsdaq OMX and ICE pledged to pay a termination fee of $350 million should the deal not go through. Additionally, they reiterated the terms for the cash portion of the deal, which, along with financing, would total $3.8 billion.
GlobeSt.com contacted several REITs, but all were hesitant to comment on the proposed deal’s possible impact on their investors. SL Green Realty Corp., for example, declined through a spokesman to comment.
In a statement issued Tuesday, Nasdaq/ICE says its proposal remains “superior by a significant and inescapable margin” to the planned NYSE Euronext/Deutsche Boerse merger. Based on Monday’s closing prices, the Nasdaq/ICE bid would come in at $42.67 per share, or 21% higher than the $35.29 value per share under the Deutsche Boerse transaction, according to Nasdaq/ICE
Nasdaq/ICE’s letter to the NYSE Euronext board last month outlining their original proposal said it would “strengthen both US and European market structures by consolidating a fragmented US equity market and creating a new pan-European equity market, for the benefit of investors and market participants and by promoting greater competition and innovation in European derivatives.” Additionally, the letter stated, “we strongly believe that a Nasdaq OMX/NYSE Euronext/IntercontinentalExchange transaction would provide clearly superior benefits, in comparison to a Deutsche Boerse transaction, both for the US and European business community and their customers, and the US and European economies as a whole.”
The NYSE Euronext/Deutsche Boerse merger would create a 17-member board, with 15 directors plus NYSE Euronext’s Duncan Niederauer as CEO and Reto Francioni, Deutsche Boerse’s CEO, as chairman. Of the 15 directors, nine would be named by Deutsche Boerse. It would keep the New York Stock Exchange’s iconic headquarters at 11 Wall St. would become one of two global head offices for what would be the world’s largest global exchange group. The Nasdaq/ICE offer would keep the combined Nasdaq/NYSE exchange based here, with New York City as its sole global headquarters.
When NYSE Euronext and Deutsche Boerse originally announced their merger plans in mid-February, Sen. Charles Schumer (D-NY) hinted at roadblocks for any arrangement that gave the Deutsche Boerse brand prominence over that of NYSE. “Some may say, ‘what’s in a name?’ but I say ‘a lot’,” said Schumer in a statement. “The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger.” He calls the stock exchange “the cradle of American capitalism” and “a national treasure.”
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