Anti-Trust Impediment Forces Nasdaq to Exit NYSE Bid

“It was black and white. There was nothing we could do to get the deal done.” Those words from an architect of Nasdaq OMX Group and IntercontinentalExchange's unsolicited bid for the NYSE Euronext,after a meeting between the management of those companies and the DOJ’s anti-trust division confirmed what many had believed on the day the bid was announced (April Fool’s Day).

NASDAQ MarketSite Tower, Times Square, New York, NY
NASDAQ MarketSite Tower, Times Square, New York, NY

There was simply no effective answer to anti-trust concerns about merging the nation’s only two listings platforms and having realized that in their DOJ meeting of last Friday, Nasdaq and ICE abandoned the bid on Monday.

While the NYSE was vindicated in its rejection of the Nasdaq/ICE bid and its insistence that talks between the two were of no value, it still has the task of assuring its own shareholders of the merits of its deal to be bought by Deutsche Boerse.

With its stock down over 15 percent Monday, NYSE shares are not trading much above what many believe is the unaffected stock price of the exchange.

So while it seems much more likely that the deal will be approved, it’s not inconceivable that NYSE shareholders will demand something more — such as a stock buyback or special dividend — once the deal is completed.

As for Nasdaq, it is clearly in need of a new strategy given the rapid consolidation of the industry of which it is a part.

No word yet on what that will be.

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