Deutsche Boerse Shares Fall After Nasdaq/ICE Counterbid For NYSE
01 Aprile 2011 - 3:23PM
Dow Jones News
Shares of Deutsche Boerse AG (DB1.XE) fell Friday, after Nasdaq
OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE)
topped the German exchange operator's offer for NYSE Euronext
(NYX), throwing its place in ongoing sector consolidation into
doubt.
At 1234 GMT, Deutsche Boerse's shares were down EUR0.54, or 1%,
at EUR53.01, having rebounded from 4% drop within the first 15
minutes following Nasdaq/ICE the announcement.
Nasdaq and ICE proposed to buy for $42.50 per NYSE Euronext
share, to be paid in cash and stock, valuing the deal around $11.3
billion. The offer, which was widely anticipated, represents a 19%
premium over the price proposed by Deutsche Boerse, both companies
said.
Under the terms of the proposed acquisition, NYSE Euronext
stockholders would receive $14.24 in cash, plus 0.4069 shares of
Nasdaq OMX common stock and 0.1436 shares of ICE common stock for
each NYSE Euronext share.
NordLB analyst Constantin Rohrbach said the counteroffer is bad
news for Deutsche Boerse and its attempt to build a global exchange
giant.
"[NYSE Euronext] shareholders will make a tough choice and take
the higher offer," Rohrbach said. "The next step will be a reaction
by Deutsche Boerse, but it's unlikely that Deutsche Boerse will
come up with a higher offer now; currently, I see Nasdaq is
ahead."
"I don't see how Deutsche Boerse can make its offer more
attractive--it was a merger offer and not a takeover bid, and they
offered the maximum they could offer and still had to pass a number
of obstacles," he said.
Deutsche Boerse said in a statement that it still considers the
tie-up the best combination of the shareholders and stakeholders of
both companies.
Any other offer would be at the disadvantage of Deutsche Boerse
shareholders, Rohrbach said.
Rohrbach also said the high break fee Deutsche Boerse would
receive because of the collapse of its NYSE Euronext deal--EUR250
million--was minor considering the total size of the deal.
A trader noted that investors fear the deal could now become
very expensive for Deutsche Boerse. However, he said that there
have always been doubts about whether NYSE with Deutsche Boerse
would succeed, given U.S. political resistance to the deal.
NordLB's Rohrbach called the high cash portion in Nasdaq's offer
surprising, saying he didn't expect Nasdaq to be as liquid, and
would be curious to find out the financiers behind the proposed
transaction.
Under the terms of the deal involving Deutsche Boerse and NYSE
Euronext, Deutsche Boerse shareholders would own 60% of the new
company, with NYSE Euronext shareholders controlling 40%. Each
Deutsche Boerse share will be exchanged for one share of the new
company's stock, while each share of NYSE Euronext will be swapped
for 0.47 share of the new company stock.
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com
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