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EXCLUSIVE-UPDATE 3-Nasdaq, ICE expected to go hostile for NYSE

Published 04/28/2011, 10:00 PM
Updated 04/28/2011, 10:04 PM
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* Pair to appeal directly to NYSE shareholders -sources

* Nasdaq board to meet in coming days on timing -sources

* NYSE board twice rejected unsolicited Nasdaq/ICE bid

* NYSE, Deutsche Boerse struck friendly deal in February (Adds no comment from companies in paragraph 5)

By Jonathan Spicer and Paritosh Bansal

NEW YORK, April 28 (Reuters) - Nasdaq OMX Group and IntercontinentalExchange Inc are expected to soon go hostile in their bid for NYSE Euronext , taking their takeover offer directly to shareholders, two sources familiar with the situation said on Thursday.

Nasdaq's board plans to meet in coming days to discuss when to make the tender offer, the sources said. NYSE Euronext's board has twice rejected their $11.1 billion bid in favor of a friendly $10.1 billion deal with Germany's Deutsche Boerse AG .

The tender offer would come "sooner rather than later," said one of the sources, who requested anonymity because talks are private.

NYSE Euronext shares rose as much as 2 percent in after hours trade following the Reuters report, before settling back to $39.73, where they closed on the day.

Spokesmen for Nasdaq and NYSE declined to comment, while ICE and Deutsche Boerse were not immediately available.

Last week, NYSE directors unanimously rejected a sweetened cash and stock bid from Nasdaq and ICE, citing risks that regulators would block it, and arguing the all-stock Deutsche Boerse offer was a better fit with long-term company strategy.

Nasdaq and ICE want to buy and split between them NYSE Euronext, which runs the Big Board and stock and futures exchanges across Europe. They have said their offer is superior and have chided NYSE for not engaging in talks.

Shareholders, meanwhile, have increasingly criticized NYSE for not engaging in talks with Nasdaq and ICE, which made their bid April 1. [ID:nN27170727]

At an annual meeting earlier on Thursday, investors pressed NYSE's board and management to take advantage of the increasingly bitter takeover battle in order to get more value for the exchange operator. [ID:nLDE73R15U]

Executives from all four of the exchanges have met with NYSE shareholders this month to press their respective cases. Shareholders are expected to vote July 7 on the Deutsche Boerse deal, which was announced in February and which would create the world's largest market operator. (Reporting by Jonathan Spicer and Paritosh Bansal, editing by Bernard Orr)

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