The negotiations of NASDAQ OMX Group and the Carlyle Group LP for taking the company private are spreading speculation among the analysts and investors that the $50 billion wave of the attempted exchange deals in the last 3 years is yet to be over. NASDAQ is the second largest owner of the US exchanges and its discussions with Carlyle broke down several times earlier over disagreements over price, as far as a person with knowledge on this matter is concerned. Incidentally, exchange companies have been subject to takeover bids and also low profits for the securities trading and under such circumstances, IntercontinentalExchange offered a takeover deal for NYSE Euronext. Hong Kong Exchanges and Clearing Ltd. have also acquired the London Metal Exchange. Incidentally, the Chief Executive Officer of NASDAQ, Robert Greifeld is currently trying to reorganize the business units and also for reducing overall expenses. The US cash equity of the company, incidentally, experienced a drop of 21% in 2012.
As stated by the Managing Partner of Aite Group LLC, Sang Lee, the momentum is building up yet again. Sang added that the firms are currently trying so that the revenue can be diversified. Apart from that, many of them are also trying to expand the global footprint. Sang further commented that it’s difficult for a public company to have its long term goals and they are bound to get hammered every quarter, if they try to meet those goals.
On yesterday, the NASDAQ shares increased by 3.1%, thereby reaching a 4-year high. On today, it has increased by 1.9% and is at $30.96 per share. In 2013, so far, NASDAQ shares have surged ahead by 24%. On the other hand, the NYSE Euronext is 52% up from its previous prices as it announced its deal with IntercontinentalExchange in last December.
The talks between NASDAQ and Carlyle were started by Adena Friedman, the Chief Financial Officer of the latter. Incidentally, Adena was the Chief Financial Officer and Corporate Strategy Head of NASDAQ, which Adena left in 2011.
When asked on this negotiation, the spokesman of NASDAQ, Rob Madden declined to make any comment; so as Randy Whitestone, the spokesman of Carlyle. As NASDAQ wants a boost in the valuation and Carlyle is seeking chances to make money, this deal may prove to be fruitful for both.