Euronext says no to latest takeover offer from rival exchanges

This week’s revised bid “is substantially the same as what was previously rejected”, NYSE Euronext chairman Jan-Michiel Hessels said.

In similar language to the board’s first rejection on April 10, Hessels said the new offer “does not provide compelling value, has unacceptable execution risk and is therefore not in the best interests of NYSE Euronext shareholders”.

Though the decision was expected, it could further pave the way for a bidding war, and it reinforces the need for Nasdaq and ICE to convince NYSE shareholders that their proposal can survive a tough US antitrust review.

Hours after the board’s decision, Nasdaq and ICE issued a statement repeating that their bid was superior and that they would continue direct discussions with shareholders.

“Nasdaq OMX and ICE have directly met each of the specific concerns initially raised by NYSE Euronext’s board and their response is now vague generalities unsupported by the actual facts,” the exchanges said.

The NYSE board reaffirmed its support for a friendly $9.8bn (£5.9bn) takeover offer from Deutsche Boerse. Though it is 14 per cent lower than the unsolicited $11.2bn offer from Nasdaq and ICE, NYSE Euronext argues it fits with the company’s strategy to grow internationally with more diverse revenues.

Nasdaq and ICE bid for the New York Stock Exchange parent company on April 1. On Tuesday, they promised to pay NYSE Euronext $350m if regulators blocked a merger – a pledge meant to ease the board’s antitrust worries and draw them to the negotiating table.

The pair – left out of a wave of global merger plans among exchanges earlier this year – said they secured committed financing for the deal from banks, and said antitrust regulators would start a review soon. The battle for the Big Board has grown increasingly bitter, and its outcome could revamp ownership of many of the largest market operators in Europe and the United States.

Both offers face tough regulatory reviews on both sides of the Atlantic, complicating things for investors betting on which bid, if any, will prevail. While NYSE chief executive Duncan Niederauer said on Monday competitors were trying to disrupt, distract and discredit his company, Nasdaq CEO Robert Greifeld said on Wednesday he will consider “all options available” as he and ICE pursue NYSE to the “endgame”.

“They’re both pursuing their strategies, and right now you’re seeing the NYSE board stand firm,” said Richard Repetto, analyst at Sandler O’Neill.