Nasdaq OMX faces pressure for transformative deal
When FOX Business reported that Nasdaq OMX had been in talks (now apparently over) with the private equity giant Carlyle about an LBO, it underscored the extent to which CEO Robert Greifeld will go to unlock value for shareholders. It's entirely possible that the idea of an LBO will continue to be discussed with a wider range of private equity firms.
At the same time, the fact that the exchange company might be willing to consider an LBO should not be construed as evidence that it has exhausted all possibilities for a transformative merger with another big exchange company. The industry has been ripe for consolidation for years, with investment bankers successfully pressing the case that companies need size and global scope to survive these days.
The NYSE Euronext's failed attempt to merge with Deutsche Bourse and subsequent deal with IntercontinentalExchange attest to that powerfully. For the Nasdaq, the fear has been that it will be left without a dance partner.
Previous attempts to effect a big transformative deal--notably its attempts to merge with the LSE--have so far failed. But there are still a few dance partners out there. For Nasdaq OMX, the urgency to nail down a deal continues to mount. It pretty much has to match NYSE Euronext, or face inevitable competitive disadvantages.
You have to wonder if the company will soon revive talks with other exchange companies, even if they were not fruitful initially. CME comes to mind.
- here's an article in Financial News