Nasdaq to Bid for NYSE?

[Stocks-to-Watch]

Although NYSE Euronext (NYX), which owns the New York Stock Exchange, last week agreed to a $10 billion deal with Frankfurt Stock Exchange operator Deutsche Börse, Nasdaq (NDAQ) is said to be contemplating a bid of its own.

Nasdaq is concerned about its position in the eat-or-be-eaten environment that consolidation has created, sources say, and if it finds it cannot afford to challenge Deutsche Börse’s bid, it is also considering buying another exchange, or selling itself to a larger rival.

As* FOX Business Network Senior Correspondent Charlie Gasparino reported last night, Nasdaq and the IntercontinentalExchange (ICE) have teamed up and are in talks that are “progressing rapidly…to the point where both are turning to ratings agencies to get their blessing for a potential bid on the New York Stock Exchange. They believe if they do something like this it would be an $11 billion deal to outmatch Deutchse Boerse…It looks like the Nasdaq and the ICE are going to do this.”

Others have suggested that Chicago Mercantile Exchange owner CME Group (CME) could also* be a partner with Nasdaq in any potential offer, the Wall Street Journal is reporting this morning.

However, even a joint bid may not be juicy enough to lure the NYSE away. There is the relatively high breakup fee of $337 million and matching rights if another offer is made for NYSE. Two suitors may also have trouble agreeing on terms of a deal as well.

If Nasdaq can’t cobble together a bid, it is also looking to potentially make a purchase to bulk up its clout, such as CBOE Holdings (CBOE), which owns the Chicago Board Options Exchange.

Selling itself would be more of a challenge, as ICE and CME, the most logical bidders, haven’t expressed much interest.



Original Article Source by Barrons.com