“Nasdaq OMX Group Inc.’s talks with Carlyle Group LP about taking the company private are spurring speculation among investors and analysts that a $50 billion wave of attempted exchange deals in the past three years isn’t over.
The discussions between Nasdaq, the second-largest owner of U.S. exchanges, and Carlyle broke down over price, according to a person with direct knowledge of the matter. The company trades at the second-cheapest multiple relative to earnings among 25 exchanges after U.S. equity trading volume dropped for a third year, according to data compiled by Bloomberg.
Exchange companies have been the subject of takeover bids amid shrinking profits for securities trading, leading to IntercontinentalExchange Inc.’s offer for the NYSE Euronext last month and Hong Kong Exchanges and Clearing Ltd.’s purchase of the London Metal Exchange. Nasdaq Chief Executive Officer Robert Greifeld has been re-organizing business units and reducing expenses after the company’s U.S. cash equity trading revenue fell 21 percent last year.
“You can see the momentum building up again,” Sang Lee, managing partner at Aite Group LLC in Boston, said in a telephone interview. “It’s about firms trying to diversify their revenue and firms trying to expand their global footprint. It’s tough for a public company to set out long-term goals and try to meet those goals without getting hammered every quarter.”
Nasdaq shares rose 3.1 percent to a four-year high of $30.38 yesterday. The shares have soared 22 percent this year. NYSE Euronext is up 51 percent since announcing its deal with IntercontinentalExchange in December. The Bloomberg World Exchanges Index has rallied 10 percent this year, compared with a 6.4 percent gain for the Standard & Poor’s 500 Index.
Carlyle Talks…”
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