NASDAQ OMX (NDAQ) and IntercontinentalExchange (ICE) today issued the following statement in response to the NYSE Euronext Board's continued refusal to discuss NASDAQ OMX/ICE's superior offer with NASDAQ OMX and ICE, despite a premium of 15%, or $1.4 billion, over the value offered under the existing agreement with Deutsche Boerse, as of April 20, 2011. Not only does this represent a significantly higher valuation for NYSE Euronext's shareholders, but a significant portion of the offer is in shares of two best-in-class exchanges with proven records of creating long term value for their shareholders. NASDAQ OMX and ICE have directly met each of the specific concerns initially raised by NYSE Euronext's Board and their response is now vague generalities unsupported by the actual facts.
The NASDAQ OMX/ICE proposed transaction is financially and strategically superior to the proposed transaction with Deutsche Boerse. Furthermore, NYSE Euronext's agreement with Deutsche Boerse expressly permits NYSE Euronext to consider superior proposals and allow third-parties to conduct due diligence in these circumstances. NASDAQ OMX and ICE call on the NYSE Euronext Board of Directors to meet with them to better understand the proposal and provide them with limited due diligence under appropriate safeguards so that no competitive risks are posed to NYSE Euronext. NASDAQ OMX and ICE are also willing to provide mutual diligence to NYSE Euronext. Taking this small step would create no commitment and can only benefit stockholders.
Robert Greifeld, Chief Executive Officer of NASDAQ OMX, said, "Discussing this with us would provide only upside for the NYSE shareholders. We have worked diligently to put a strong proposal before their Board. Continually refusing to engage is starting to appear as if they are protecting their deal rather than acting in the best interest of their shareholders. We will not be deterred by the Board's attempts to protect an inferior transaction."
Jeffrey C. Sprecher, Chairman and Chief Executive Officer of ICE, said, "We have approached this proposed transaction from a thoughtful strategic perspective with a premium offer that reflects our strong commitment to consummating our transaction and to create a better market structure for market participants. As a leading global futures exchange operator, ICE will strengthen competition in European derivatives, while NASDAQ OMX works with regulators to rebuild a cohesive U.S. market structure and confidence in the cash equities markets. We do not understand why the NYSE Euronext Board continues to protect the lower-premium Deutsche Boerse takeover, despite urging from its shareholders that they consider our transaction. There is no risk in engaging with us to ensure that the best interests of NYSE Euronext shareholders and markets are served."
SUPERIOR AND ACTIONABLE PROPOSAL DESERVES CONSIDERATION AND DUE DILIGENCE OPPORTUNITY
The existing Deutsche Boerse agreement permits the NYSE Euronext Board to engage in due diligence discussions with NASDAQ OMX and ICE if it believes that "there is a reasonable likelihood that such a proposal could constitute a superior proposal." The NASDAQ OMX and ICE proposal offers superior value, 15% over the Deutsche Boerse alternative as of April 20, contains no financing out and is fully financed. The $350 million reverse termination fee that NASDAQ OMX and ICE have offered for failure to obtain antitrust approvals evidences their commitment to and confidence in the proposal. In sharp contrast, the Deutsche Boerse transaction offers no reverse break-up fee for antitrust, despite the admission by NYSE Euronext's CEO that the Deutsche Boerse transaction faces regulatory challenges.
NASDAQ OMX and ICE will continue their direct discussions with NYSE Euronext shareholders who remain highly interested in the NASDAQ OMX/ICE proposal.
FINANCIALLY AND STRATEGICALLY SUPERIOR PROPOSAL
- Based on April 20 closing prices, the NASDAQ/OMX proposal is valued at $42.69 per NYX share. This is 15%, or $1.4 billion, above the $37.26 value per NYX share under the proposed Deutsche Boerse transaction.
- NASDAQ OMX and ICE are strong operators — with management teams that have a proven ability to integrate businesses and realize synergies, while bringing innovation to markets.
- NASDAQ OMX and ICE are global market operators. There is no debate about the importance of global reach and the demonstrated growth of these two companies has been driven by success as global operators in local jurisdictions.
- NASDAQ OMX and ICE are two highly focused players in the cash equities and derivatives markets. A NASDAQ OMX/NYSE Euronext and an ICE/Liffe combination will strengthen competition and innovation for the benefit of all shareholders and market participants.
- Competition and confidence in markets will be enhanced by the NASDAQ OMX/ICE transaction. The NYSE Euronext Board should take the time to understand the important benefits of this proposed transaction to markets and customers.
- NASDAQ OMX and ICE will be able to leverage their globally distributed platforms. The proposal offers enhanced volume, growth, and efficiencies; improved technology would serve the needs of a diverse customer base.
- NASDAQ OMX and ICE reiterate their request for the Board of NYSE Euronext to meet to better understand our proposal, allow due diligence to be conducted with appropriate safeguards to protect competitively sensitive information, and work toward a superior outcome for NYSE Euronext stockholders.
Not only does this represent a significantly higher short term valuation for NYSE Euronext's shareholders, but as a significant portion of our offer is in shares of two best in class exchange leaders with proven records of creating value for their shareholders, we believe this offer will result in higher long term value creation as well.
The future of the global exchange business will continue to be a competitive race based on technological advancement, innovation and efficiency. This race will be won by franchises that are able to anticipate and act on this evolution. ICE and NASDAQ OMX have been and continue to be at the forefront with leading technology platforms, proven innovation in market structure, product development and clearing. Importantly, this has been delivered on a cost-efficient basis, which enables high service levels for customers at highly competitive prices.
In addition, the regulatory framework is moving away from the status quo and increasing global competition across both trading and clearing. Only the most nimble and efficient operators, such as NASDAQ and ICE, will succeed in such an environment.
Additional Details
All details and other supporting information related to this proposal are available on http://www.nasdaq.com/deal and http://ir.theice.com
