The Nasdaq Stock Market, Inc. reports it has entered into a definitive agreement to acquire the Boston Stock Exchange (BSE); and, at the same time, the Montreal Exchange Inc. says that it is boosting its stake in the Boston Options Exchange (BOX).
Nasdaq is acquiring the BSE, including the holding company BSE Group, the Boston Equities Exchange, the Boston Stock Exchange Clearing Corporation, and BOX Regulation. Along with these businesses, Nasdaq will acquire a self-regulatory organization license for trading both equities and options. Nasdaq’s acquisition of the BSE Group is valued at approximately US$61 million.
It will not acquire an interest in the Boston Options Exchange from the BSE. However, a regulatory framework for the BOX market will remain in place, it says. Nasdaq will operate the regulatory services provider to the BOX, which is an options trading facility of the BSE. Nasdaq and BOX are discussing a plan regarding the future regulatory structure for BOX.
At the same time, the Montreal Exchange announced that it is in negotiations aimed at increasing its ownership position in the BOX from 31.4% to a maximum of 53.2%, subject to regulatory approval by the U.S. Securities and Exchange Commission.
The MX had previously intended to increase its participation in BOX to 44.7%, following an agreement to purchase a 13.3% stake signed in August 2006 with the BSE. The current intention is to acquire the entire 21.9% partnership interest in BOX held directly and indirectly by the BSE.
With the completion of the transaction, the BOX partners will be MX, Citadel, Citigroup, Credit Suisse First Boston, Interactive Brokers, J.P. Morgan, Morgan Stanley and UBS.
Bob Greifeld, president and CEO of Nasdaq, said, “This transaction provides added liquidity, new trading choices and an enhanced competitive market environment. Nasdaq’s acquisition of the BSE will expand Nasdaq’s execution offerings, and deliver user and investor benefits consistent with our Brut and INET acquisitions.”
Greifeld added, “We believe a second exchange license in both equities, and in the future options, will provide market structure flexibility as we continue to deliver on our mission of being the number one trading platform in the transactions business.”
The transaction is subject to SEC approval and approval by BSE members. Nasdaq & BS’s board of directors have approved the transaction, which is expected to close by early first quarter 2008. It is anticipated that the transaction will be accretive to Nasdaq shareholders within 12 months from closing.
Nasdaq to buy Boston Stock Exchange
Montreal Exchange in negotiations to increase ownership in BOX
- By: James Langton
- October 2, 2007 October 2, 2007
- 08:45