10 May 2011

WSJ: ICE, Nasdaq warn against rushed NYSE shareholder vote

IntercontinentalExchange and Nasdaq OMX told shareholders of NYSE Euronext yesterday to demand more time to review the proposed merger with Deutsche Börse, warning that the Big Board had rushed into judgement on the deal.

Nasdaq OMX and ICE renewed calls for investors to put pressure on NYSE Euronext's Board to meet with its uninvited suitors, after the company twice rejected overtures from ICE and Nasdaq OMX last month. "Faced with a year-long review and serious competition issues in Europe for the proposed Deutsche Börse transaction, NYSE Euronext stockholders are being asked to take a leap of faith by voting for the proposed Deutsche Börse transaction on July 7th." Yesterday was the record date for owning shares of NYSE Euronext in order to be eligible to vote on the agreed combination with Deutsche Börse. The letter comes as both NYSE Euronext and the ICE-Nasdaq team have ramped up rhetoric about the future ownership of the New York Stock Exchange, wooing investors who will decide on an agreed merger with Deutsche Börse announced in mid-February.

NYSE Euronext has cast Nasdaq OMX and ICE as spoilers of its planned deal with Deutsche Börse, arguing that combining the listings businesses of NYSE and Nasdaq OMX will not pass a US antitrust review, while a meeting would accomplish little beyond giving competitors a glimpse of NYSE Euronext's inner workings. The letter from ICE and Nasdaq accused NYSE Euronext's Board of "stonewalling" in its refusal to talk, and questioned the truthfulness of increased synergies detailed two weeks ago by NYSE Euronext chief executive, Duncan Niederauer.

The joint partners also criticised NYSE Euronext for pushing its investors to vote on a combination that will have little clarity from regulators for months, and as much as a year. The merger of NYSE and Deutsche Börse's European derivatives markets is seen bringing a lengthy probe.

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