While the battle over the NYSE rages and we wait for a response from that exchange to the proposed $42.50 dual stock and cash bid from Nasdaq and Ice, it’s worth mentioning that among the most likely outcomes here is that the NYSE doesn’t get bought at all.
In the next week I expect the NYSE will issue a resounding rejection of the Nasdaq bid. The NYSE will likely say that it does not believe the bid can ever lead to a deal, largely due to the questions surrounding the ability of the deal to win approval from anti-trust regulators.
The NYSE may also choose to note a lack of financing commitment (though Nasdaq and ICE can get money when they need it), but its most potent weapon may come if it chooses to cite that its merger with Deutsche Boerse is just that, a merger, and therefore does not bring the so called “Revlon duty” that requires a company to consider other offers.
Meanwhile, Deutsche Boerse needs 75 percent of its shareholders to vote in favor of the current deal and has thus far done little to indicate that it will ask its shareholders to both pay more or pay more in cash. And of course, were it to do so, it would then force the NYSE to have a “Revlon Duty”.
With Nasdaq’s stock price having soared since it unveiled its audacious joint bid with ICE, it’s clear its shareholders are taking the deal seriously. And it seems likely the NYSE shareholders will not be quick to dismiss the Nasdaq bid as well. That may well play out in the NYSE shareholder vote, but with no "Revlon Duty" invoked, would the NYSE really put a stiff arm to Nasdaq?
It certainly has to be considered.
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