NASDAQ and IntercontinentalExchange Raise the Stakes in Battle for NYSE (NDAQ, ICE, NYX, BAC, WFC)

The NASDAQ OMX Group, Inc. NDAQ and IntercontinentalExchange, Inc. ICE have made a bid to take over NYSE Euronext NYX for a price well above the nearly $10 billion bid that was earlier offered by Germany's Deutsche Boerse, which owns the Frankfurt stock exchange. NASDAQ OMX and IntercontinentalExchange say that their $42.50 cash and stock bid valued at about $11.3 billion represents a 19% premium over the offer made by Deutsche Boerse. The companies' plan to finance the cash portion of their offer with cash on hand as well as $3.8 billion in financing from a group of major financial institutions, including Bank of America Corporation BAC and Wells Fargo & Company WFC. According to the joint press release from NASDAQ OMX Group, Inc. (NDAQ) and IntercontinentalExchange, Inc. (ICE), their plan has been reviewed by a group of banks that "are prepared to arrange fully committed financing sufficient to consummate the transaction." The takeover plan calls for IntercontinentalExchange, Inc. to buy NYSE Euronext's derivatives businesses and for NASDAQ OMX to buy the remaining businesses, which include the NYSE Euronext stock exchanges that are located in New York, Paris, Brussels, Amsterdam and Lisbon, and the company's American options business as well. The two companies say that the deal would create a global leader that would be better able to compete in the global exchange market and that it would enhance the ability of regulators to monitor the markets, while reducing the risk of more flash-crash scenarios and market fragmentation. While American regulators may scrutinize the takeover bid, the companies noted that if the takeover is allowed to proceed it will ensure that the United States retains leadership in the global capital markets.