Nasdaq OMX and the Intercontinental Exchange (ICE) hope to gatecrash Deutsche Borse's plan to merge with NYSE Euronext to form the world's largest stock exchange, unveiling their own rival bid yesterday. Their offer values the New York market at $11.3bn (£7bn), some $1bn more than the German exchange has offered to pay.
The bid, which is made up of $14.24 in cash plus 0.4059 Nasdaq shares and 0.1436 ICE shares for each NYSE share, comes weeks after NYSE agreed to Deutsche Borse's $10.2bn bid. The new offer values NYSE shares at $42.5 apiece.
The battle for NYSE is the latest turn in an industry-wide consolidation drive that has seen the London Stock Exchange mount an offer for Canada's TMX. If successful, the joint bid would see ICE take control of NYSE's derivatives business, while Nasdaq would take over the rest of the company, including NYSE Euronext exchanges in New York, Paris, Brussels, Amsterdam and Lisbon. It would also retain the US options business.
Robert Greifeld, the Nasdaq OMX CEO, said the combination would make US markets more attractive. "During the last five years, more than 90 per cent of the top 100 global listings chose not to list in the US, depriving US investors of the opportunity to easily invest and trade in these companies," he said. "The combination of the two leading US exchanges delivers an opportunity to build a global exchange platform that has the scale and growth potential to benefit investors, issues and other market participants."
In response, Deutsche Borse said it continued to believe that its plan was the best for both its own and NYSE shareholders. Both bids face scrutiny in the US and Europe, with the EU's antitrust chief, Joaquin Almunia's, already having said that the German plan was likely to require a "deep investigation".
Analysts said that the German group would have a tough time beating the new bid. "It's quite a bold move from Nasdaq and ICE," Karl Morris, an analyst at Keefe Bruyette & Woods, said. "Certainly I think the premium they're paying is quite high. It makes you wonder what Deutsche Borse is going to do about this and I struggle to see how they can lift their bid to match, given that when their deal was announced, there was a feeling they were giving too much away."