Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE) on Friday outlined a plan to reshape the global exchange sector by carving up NYSE Euronext (NYX) with an unsolicited offer that tops the terms of the Big Board operator's agreed merger with Deutsche Boerse AG (DB1.XE, DBOEF).

The cash-and-stock offer would see Nasdaq OMX expand its franchise in U.S. and European equity and options trading and vault Atlanta-based ICE into the world's fourth-largest derivatives exchange by volume--it is currently ranked 14th.

Executives from Nasdaq and ICE downplayed potential regulatory hurdles from the plan, describing the availability of NYSE Euronext as a "once-in-a-lifetime opportunity" at a time when lawmakers are pushing more of the huge over-the-counter derivatives business towards exchange trading and clearing.

Nasdaq Chief Executive Bob Greifeld risked being outflanked by the latest wave of industry consolidation, and acquiring NYSE Euronext's equity and options franchise would cap years of intense rivalry between the companies. The potential synergies would strengthen a cash equity business where margins have been eroded by the emergence of new rivals such as BATS Trading and Direct Edge.

For Jeff Sprecher, his counterpart at ICE, the NYSE Liffe derivatives franchise would provide a long-sought entry into the interest-rate futures and swap clearing markets, and boost its position to compete with CME Group Inc. (CME) and the Eurex arm of Deutsche Boerse.

"We see minimal regulatory issues," said Sprecher, the ICE chairman and CEO, who told reporters that the partners had taken informal soundings that gave them confidence regulators would back the plan.

Sprecher said he had learned from its failed bid for the Chicago Board of Trade--which it lost to CME--and would be more attentive to shareholders while pursuing this offer.

Greifeld and Sprecher both emphasized the potential boost to competition from their plan at a time when reform of the derivatives market promises to unleash a plethora of new trading and clearing entities. They also said it would strengthen the position of U.S. capital markets and solidify the position of London and Paris as global centers.

Other observers were less convinced that Nasdaq and ICE would succeed in playing the "national champion" card. "This is going to be global regulatory warfare," says one trader, a veteran of previous exchange deals.

Nasdaq OMX and ICE said they are proposing to buy NYSE Euronext for $42.50 in cash and stock per NYSE Euronext share, or about $11.3 billion, based on the respective Nasdaq OMX and ICE closing share prices on Thursday. This compares with the $35 a share value of the Deutsche Boerse plan.

Under the Nasdaq-ICE offer, NYSE Euronext shareholders would get $14.24 in cash, plus 0.4069 shares of Nasdaq and 0.1436 shares of ICE in exchange for each of their shares.

NYSE Euronext shares were recently up 11.2% at $39.13, with Nasdaq recovering from an early drop to trade 2.3% higher at $26.42. ICE slid 3.4% to $119.36 and Deutsche Boerse shares were down 1.2%. CME was up 1.5% at $306.

Deutsche Boerse said it has noted the offer and "continues to strongly believe that the envisaged merger of Deutsche Boerse and NYSE Euronext is the best possible combination for both shareholder groups and the stakeholders of the companies." NYSE Euronext said in a statement that it would review the proposal.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
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