Shareholders urge NYSE to consider Nasdaq bid

AP News
Posted: Apr 28, 2011 1:42 PM
Shareholders urge NYSE to consider Nasdaq bid

Top executives of NYSE Euronext Inc., parent company of the New York Stock Exchange, deflected angry questions about its rejection of a rival takeover bid at the company's annual shareholder meeting Thursday.

Last week NYSE Euronext's board again turned down an unsolicited $11.3 billion bid from Nasdaq OMX Group Inc. and IntercontinentalExchange Inc. that would carve the company in half. NYSE Euronext says it favors a deal it already has in place to combine with Deutsche Boerse, owner of the Frankfurt stock exchange.

Jan-Michiel Hessels, the chairman of NYSE Euronext, told shareholders that the Nasdaq bid was "fraught with unacceptable risk" and would not clear regulatory hurdles. Nasdaq and the New York Stock Exchange are the two main stock exchange operators in the U.S.

"The request for a meeting is a tactic principally designed to be disruptive to our combination," Hessels said.

The directors of NYSE Euronext were re-elected by an 80 percent margin, but shareholders also approved a proposal that gave them the right to call special stockholder meetings.

Duncan Niederauer, CEO of NYSE Euronext, told reporters the new rule would take several months to implement and wouldn't affect the merger. The board had recommended shareholders vote against the proposal.

Shareholders said Nasdaq representatives had appealed to them directly to discuss the bid. They expressed concern that the takeover attempt, which was worth $1.4 billion more than the Deutsche Boerse deal, was not being considered. Hessels called the Nasdaq buyout offer an "empty vessel," saying "it looks nice, but there is nothing there."

NYSE Euronext also announced that its income rose 19 percent in the first quarter thanks to sharply higher trading volumes on its U.S. and European exchanges.

The trans-Atlantic operator of the Paris, New York and other stock exchanges said in a statement it earned $155 million in the January-March quarter, up from $130 million a year earlier. Earnings per share excluding one-time items rose to 68 cents from 54 cents.

Revenue rose 6 percent to $1.15 billion on gains in average daily volume in cash trading and listings, which rose 32 percent in Europe and 15 percent in the U.S.

The company booked $15 million in costs during the quarter related to its proposed $10 billion merger with Deutsche Boerse.


Associated Press writer Greg Keller in Paris contributed reporting.