NYX Nyse Euronext

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 proposal would see Nasdaq OMX acquire the transatlantic equity and options franchise of its long-term foe and propel Atlanta-based ICE into the elite of global derivatives exchanges with important new operations in interest-rate futures and clearing over-the-counter swaps.

Executives from ICE and Nasdaq said their proposal is more likely to secure regulatory approval than the NYSE-Deutsche Boerse plan, and acknowledged potential U.S. hurdles with some unabashed exchange flag waving.

Jeff Sprecher, chairman and CEO of ICE, said in a CNBC interview that the plan would achieve "an important social goal" by reshaping U.S. capital markets that are being increasingly bypassed by global traders and investors.

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 Sprecher, 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, who told reporters that the partners had taken informal soundings that gave them confidence regulators would back the plan. He also said financing was in place for a proposal offering shareholders two-thirds in stock and a third in cash.

Sprecher said he had learned from the failed bid for the Chicago Board of Trade--which his company 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 London and Paris as financial 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.

Nasdaq said the combination -- to be called Nasdaq NYSE Euronext Group -- would be accretive to shareholders in 12 to 18 months. ICE and Nasdaq forecast $740 million in annualized synergies three years after completion, well ahead of the NYSE-Deutsche Boerse plan.

NYSE Euronext shares were recently up 11.5% at $39.22, with Nasdaq recovering from an early drop to trade 5.8% higher at $27.36. ICE slid 3.7% to $118.92 and Deutsche Boerse shares were down 1.4% at 51.82 euros. CME was up 1% at $304.48.

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

-Matt Jarzemsky and Vladimir Guevarra contributed to this article.

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