NYX Nyse Euronext

The board of NYSE Euronext (NYX) on Thursday again rejected a proposal from Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE) to buy and split the Big Board parent.

NYSE Euronext's board unanimously reaffirmed its commitment to the standing deal with Deutsche Boerse AG (DB1.XE), saying that an improved offer from ICE and Nasdaq this week was "substantially the same" as a previously rejected proposal.

"Consequently, our view has not changed," said NYSE Euronext Chairman Jan-Michiel Hessels in a statement. "This proposal does not provide compelling value, has unacceptable execution risk and is therefore not in the best interests of NYSE Euronext shareholders."

ICE and Nasdaq on Tuesday added a $350 million reverse breakup fee to their proposal alongside about $3.8 million in committed financing from a roster of banks, which is good for 12 months. Nasdaq OMX Chief Executive Bob Greifeld said Wednesday the suitors' game plan goes out one year and he is prepared to pursue the bid to the "end game."

"We're in this for the duration," Greifeld said Wednesday in a conference call discussing first-quarter earnings.

Thursday's spurning of the Nasdaq-ICE offer--which values NYSE Euronext at about $11.2 billion--comes one week before a meeting of NYSE shareholders, some of whom already were rankled by their board's prior refusal to talk with the ICE-Nasdaq team or push for improved terms from the Germans.

Investors in NYSE Euronext could make their dissatisfaction known by casting their vote against board members next week. ICE CEO Jeff Sprecher said in an interview this week that the rival suitors would not file a proxy or seek to engage in the meeting, but rather "sit back and watch."

NYSE Euronext and Deutsche Boerse have in the past two weeks promoted their tie-up to shareholders as creating a megaexchange that would hold a leading position in equities trading and listings as well as derivatives and market technology, primed to forge partnerships in the fast-growing Asian-Pacific region.

ICE and Nasdaq have argued that they can make NYSE Euronext's businesses more profitable by selling the U.K. futures component to ICE and the equities- and technology-related segments to Nasdaq OMX, both of which aim to sharply reduce costs.

The board of NYSE Euronext have said the Deutsche Boerse combination aligns with the company's longstanding strategic goals of becoming a more diverse and broadly distributed exchange operator, while highlighting antitrust concerns around Nasdaq's proposal to combine nearly all U.S. share listings under one parent.

Nasdaq and ICE have focused on the competitive issues raised in Europe by the Deutsche Boerse-NYSE deal, which would align the region's two largest futures-trading platforms.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

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