Summary
This 8-K filing by The Nasdaq Stock Market, Inc. (Nasdaq) on November 27, 2006, details significant financing arrangements and a material definitive agreement related to its offer to acquire the London Stock Exchange Group plc (LSE Group). Nasdaq, through its subsidiary Nightingale Acquisition Limited (NAL), launched offers to acquire all outstanding ordinary and B shares of LSE Group for a total consideration of approximately £2.0 billion ($3.8 billion). To fund this acquisition, Nasdaq has secured a substantial New Credit Facility totaling up to $5.1 billion, comprising a revolving credit facility, term loans, and an unsecured bridge loan. This facility will refinance existing Nasdaq borrowings. Additionally, Nasdaq is raising capital through an equity financing of up to $775 million in senior perpetual preferred stock. The filing also references a $150 million loan for a previously announced share purchase of LSE Group shares. Investors should note the complexity of these financing structures, the leverage involved, and the strategic implications of acquiring a major European exchange.
Key Highlights
- 1Nasdaq, through its subsidiary NAL, has made offers to acquire all outstanding shares of the London Stock Exchange Group plc (LSE Group) for approximately £2.0 billion ($3.8 billion).
- 2A new credit facility of up to $5.1 billion has been secured to finance the LSE Group acquisition, including a revolving credit facility, term loans, and a bridge loan.
- 3The New Credit Facility will refinance Nasdaq's existing credit facilities and some existing LSE Group bonds.
- 4Nasdaq is also raising up to $775 million through the issuance of senior perpetual preferred stock.
- 5The acquisition financing also includes a $150 million loan related to a prior purchase of LSE Group shares.
- 6The New Credit Facility includes covenants such as maintaining minimum interest coverage and maximum leverage ratios, and limitations on dividends, debt, and acquisitions.
- 7The terms of the senior perpetual preferred stock include an initial liquidation preference of $1,000, accreted dividends, redemption options for Nasdaq, and limited voting rights.