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NYSE says no to NASDAQ buyout

The NYSE board

Updated Report

STEVE CHIOTAKIS: The New York Stock Exchange said today it will reject a hostile takeover bid by NASDAQ and the Intercontinental Exchange. NASDAQ just last week offered more than $11 billion for the NYSE, hoping to outbid Germany's stock exchange.

Marketplace's Alisa Roth is with us live from New York to explain all of this drama before the opening bell. Good morning Alisa.

ALISA ROTH: Good morning.

CHIOTAKIS: Now, this sounds like a good deal, what's wrong with the NASDAQ bid?

ROTH: On paper it does sound good -- NASDAQ is offering $11.3 billion -- which is about 16 percent more than what the Deutsche Boerse -- the German stock exchange you mentioned -- offered a couple of weeks ago. So it's a lot more money. But the NYSE's management says a deal to merge the NYSE and the NASDAQ will never make it past the anti-trust regulators. And, the NASDAQ deal would also involve a lot of cost-cutting, down the line, which would involve job cuts. So it's pretty likely politicians here in New York would put up a big fight over the deal.

CHIOTAKIS: All right so then what's the next step? What happens now?

ROTH: The fight over the NYSE -- and really over stock exchanges all over the world -- is just starting. We're really in a period of big consolidations and mergers, and the exchange landscape is really changing. But that's a mid- to long-term issue. Right now, what we're going to see is NASDAQ going directly to the NYSE's shareholders. And trying to convince them that they'll come out ahead by supporting the NASDAQ bid. And no matter what happens there, it's not like the NYSE-Deutsche Boerse deal is sealed either. It's also going to face tough questions from the anti-trust people. Not just here in the U.S., but in Europe, too.

CHIOTAKIS: Marketplace's Alisa Roth, reporting from New York. Thanks.

ROTH: You're welcome.


ORIGINAL REPORT

JEREMY HOBSON: The New York Stock Exchange says it's rejecting a takeover bid by NASDAQ and the the Intercontinental Exchange. Last week, NASDAQ offered $11.3 billion for it in the hopes of beating a rival bid from the German stock exchange.

For more on this, let's bring in Marketplace's Alisa Roth. She's live in New York. Good morning Alisa.

ALISA ROTH: Good morning.

HOBSON: What's wrong with the NASDAQ offer and why is the NYSE rejecting it?

ROTH: Let's start with what's right about the proposed deal. As you said, NASDAQ is offering $11.3 billion for the NYSE. Back in February, the Deutsche Boerse, the German stock exchange offered $9.7 billion. So this new offer would actually bring in a lot more money. But the NYSE's board says there are all kinds of problems with the offer -- the biggest concern being that anti-trust regulators wouldn't let it go through. The other big problem is, the NASDAQ deal proposes a lot of cost savings, mostly by cutting jobs. So politicians here in New York would probably fight the deal pretty hard, too.

HOBSON: So where do these negotiations go from here?

ROTH: The NASDAQ bid really set off the official fight for the NYSE. And we can expect that to continue -- because this is really about the future of stock markets -- you know, how stocks and other instruments are traded all over the world. But in the short-run, this means the NASDAQ is going to have to convince the New York Stock Exchange's shareholders that they'll make out better with the NASDAQ deal. The other thing is, the NYSE deal with the Deutsche Boerse still has regulatory hurdles of its own to jump, both here and in Europe. So, even if the NYSE sticks with the original plan, it's not a done deal yet.

HOBSON: Marketplace's Alisa Roth in New York, thanks.

ROTH: You're welcome.

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