Nasdaq/ICE up ante in NYSE Euronext battle with reverse break-up fee

NEW YORK and ATLANTA, April 19, 2011 /PRNewswire/ -- NASDAQ OMX (NDAQ) and IntercontinentalExchange (ICE) today announced they have taken a series of steps demonstrating their commitment to pursuing their superior proposal with NYSE Euronext and providing greater certainty to the NYSE Euronext Board.

  • A proposed merger agreement has been submitted to the NYSE Euronext Board that is consistent with the terms of the current business combination agreement with Deutsche Boerse;
  • NASDAQ OMX and ICE are prepared to pay a reverse termination fee of $350 million (USD), in the event that they are unable to obtain necessary antitrust and competition approvals;
  • NASDAQ OMX and ICE have received fully committed financing of $3.8 billion from a group of leading institutions; and
  • Actions necessary to start the U.S. antitrust review processes have been taken and those reviews are expected to commence shortly.

A copy of the letter that accompanied the proposed merger agreement sent to the NYSE Euronext Chairman today is attached to this press release.

Robert Greifeld, Chief Executive Officer of NASDAQ OMX, said, "Our actions today demonstrate our commitment to pursuing this transaction and further illustrate exactly how our proposal is superior. This should also eliminate any concerns that the NYSE Euronext Board has about engaging in discussions with us. It's time to allow a reasonable and expeditious diligence process to begin."

Jeffrey C. Sprecher, Chairman and Chief Executive Officer of ICE, said, "Based on the feedback we have heard from NYSE Euronext stockholders, we are more confident than ever that the proposed NASDAQ OMX/ICE transaction is better for them, the markets and the exchange's customers. We trust that the NYSE Euronext Board will seek to enhance the value to its stockholders by meeting with us to evaluate our superior proposal."

Superior Proposal

The NASDAQ OMX/ICE proposal remains superior by a significant and inescapable margin. Based on April 18th closing prices, the NASDAQ OMX/ICE proposal outlined in the proposed merger agreement is valued at $42.67 per NYX share. This is 21%, or $2 billion, above the $35.29 value per NYX share under the Deutsche Boerse transaction. Under the NASDAQ OMX/ICE proposal, the combined company would incorporate the iconic NYSE name and floor and strengthen investor confidence in U.S. equity markets, which have been shaken by fragmentation. In addition, NYSE Euronext stockholders will benefit from the transaction's cash component as well as a meaningful participation in a newly combined ICE/Liffe derivatives business that will preserve competition in the European Union.

$350 Million Reverse Break-Up Fee Demonstrates Confidence in Ability to Receive Necessary Competition Approvals

The addition of the $350 million reverse break-up fee in the proposed merger agreement, which NYSE Euronext would receive in the event of a failure to obtain required antitrust or competition approvals, demonstrates how convinced we are that we will obtain all necessary regulatory approvals. These significant improvements to the Deutsche Boerse proposal address any legitimate concerns of the NYSE Euronext Board with respect to the execution risk of the NASDAQ OMX/ICE proposal as compared to the execution risk of the Deutsche Boerse proposal, particularly in light of the substantial overlap in the Deutsche Boerse and NYSE Euronext European derivatives businesses that may create execution and timing risk in the Deutsche Boerse deal. In short, our addition of a reverse break-up fee demonstrates our confidence.

Committed Financing of $3.8 Billion

As previously announced, NASDAQ OMX and ICE would finance the cash portion of the acquisition purchase price through cash on hand and a combined $3.8 billion financing commitment. NASDAQ OMX has signed and received a fully committed financing from a syndicate of banks including Bank of America, Nordea Bank AB (publ), Skandinaviska Enskilda Banken AB (publ) and UBS Investment Bank. ICE has signed and received fully committed financing from a syndicate of banks including Wells Fargo and Bank of America. NASDAQ OMX and ICE remain committed to a prudent use of leverage to finance the transaction. In particular, NASDAQ OMX is focused on maintaining its investment-grade credit rating.

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