8-KMaterial AgreementsFinancial Events

NASDAQ, INC. 8-K Report, Material Agreement (May 16, 2006)

Filed May 16, 2006For Securities:NDAQ

Summary

This Form 8-K filing by The Nasdaq Stock Market, Inc. (NDAQ) details a significant strategic acquisition of shares in the London Stock Exchange plc (LSE). On May 10, 2006, Nasdaq, through its wholly-owned subsidiary Nightingale Acquisition Limited, agreed to purchase approximately 5.4% of the LSE's issued share capital, totaling 13,791,440 shares, for a total consideration of approximately GBP 172.1 million ($321.4 million). These shares were acquired from UBS AG and other LSE shareholders in arms-length transactions.

Key Highlights

  • 1Nasdaq acquired an additional 13,791,440 shares of the London Stock Exchange (LSE), representing approximately 5.4% of its issued share capital.
  • 2The total cost for these shares was approximately GBP 172.1 million ($321.4 million), based on an exchange rate of 1.87 USD per GBP.
  • 3The acquisition was completed on May 15, 2006, with funding primarily from a $310.1 million credit facility with Bank of America affiliates and $11.3 million in cash on hand.
  • 4This purchase increases Nasdaq's total stake in the LSE to approximately 24.1%, holding 61,681,720 shares.
  • 5A potential conflict of interest was disclosed, as Daniel Coleman, a Nasdaq board member, is also a senior executive at UBS Securities LLC, a subsidiary of UBS AG, one of the sellers.
  • 6The transactions were conducted in ordinary market transactions with terms determined through arms-length negotiations.
  • 7The acquisition is considered a material definitive agreement under Item 1.01 of Form 8-K.

Frequently Asked Questions

The main purpose of this 8-K filing is to report Nasdaq's entry into a material definitive agreement to acquire a significant number of shares in the London Stock Exchange (LSE), thereby increasing its stake in the LSE.

Nasdaq acquired an additional 13,791,440 shares of the LSE, representing approximately 5.4% of its issued share capital. The total cost was approximately GBP 172.1 million, which was about $321.4 million at the time of the transaction.

Nasdaq financed this acquisition primarily by drawing $310.1 million from its credit facility with Bank of America affiliates, which became effective in April 2006, and using $11.3 million from its existing cash reserves.

After completing these share purchases, Nasdaq's total holding in the LSE increased to 61,681,720 shares, which represents approximately 24.1% of the issued share capital of the London Stock Exchange.