Nasdaq and IntercontinentalExchange are withdrawing their proposed $11 billion bid for the parent of the New York Stock Exchange after recognizing they would not receive regulatory approval for the transaction and could potentially face a lawsuit attempting to block the deal.
The decision clears an obstacle to NYSE Euronext Inc.'s previous $10 billion deal to combine with the German exchange operator Deutsche Boerse.
Nasdaq OMX Group Inc. and IntercontinentalExchange Inc. said Monday that they held unsuccessful talks with the antitrust division of the Justice Department about their joint bid for NYSE Euronext.
The Justice Department said it informed the companies the government would file an antitrust lawsuit to block the deal, as it believed the acquisition would have substantially eliminated competition for corporate stock listing services and other data products.
Shares of NYSE Euronext dropped $4.09, or 10 percent, to $36.00 in morning trading. The Deutsche Boerse's offer is lower and the withdrawal of the competing bid makes it unlikely that the German company will feel compelled to raise its bid.
Shares of Nasdaq OMX stock fell 21 cents to $26.70, while Atlanta-based IntercontinentalExchange gained $3.76, or 3.2 percent, to $122.08.
Nasdaq OMX CEO Bob Greifeld said in a statement that the companies had offered a variety of "substantial remedies" to try to secure regulatory approval, including the sale of the NYSE Self-Regulatory Organization and its related businesses.
"While we are surprised and disappointed in the antitrust division's conclusion, some of the uncertainty, at least as it relates to our joint proposal, has been resolved," he said.
The announcement comes one week after Nasdaq and ICE reached out directly to NYSE Euronext shareholders, issuing a letter saying that the NYSE Euronext board was rushing a vote without exploring better alternatives.
The board had twice rejected the Nasdaq and ICE bid in favor of the Deutsche Boerse offer despite the lower price.
In a statement, Duncan Niederauer, CEO of NYSE Euronext, continued to tout the benefits of the existing transaction. "As we have consistently maintained, the combination with Deutsche Boerse creates the world's premier exchange group a geographically diverse business across multiple asset classes that will create compelling long term value for our shareholders."
NYSE Euronext shareholders are scheduled to vote in early July on the deal with the German company.
Source: http://www.npr.org/2011/05/16/136356436/nasdaq-ice-withdraw-bid-to-buy-nyse-parent?ft=1&f=1001
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