Summary
The Nasdaq Stock Market, Inc. (Nasdaq) announced on November 7, 2007, that it has entered into a definitive agreement to acquire the Philadelphia Stock Exchange, Inc. (PHLX) for $652 million in cash, subject to working capital adjustments. This strategic acquisition, to be completed via a merger where PHLX becomes a wholly-owned subsidiary of Nasdaq, is subject to standard closing conditions, including PHLX shareholder and regulatory approvals. Nasdaq has secured voting agreements from PHLX's six largest institutional stockholders, who collectively hold approximately 77% of the voting shares, to ensure shareholder approval. The agreement includes provisions for PHLX to engage in discussions regarding superior acquisition proposals only under specific conditions and allows for a termination fee of $22.82 million payable by PHLX under certain circumstances, such as accepting a superior offer. This move signals Nasdaq's intent to expand its market presence and offerings.
Key Highlights
- 1Nasdaq to acquire Philadelphia Stock Exchange (PHLX) for $652 million in cash.
- 2Acquisition to be structured as a merger, making PHLX a wholly-owned subsidiary of Nasdaq.
- 3Transaction is subject to customary closing conditions, including PHLX shareholder and regulatory approvals.
- 4Nasdaq has secured voting agreements from PHLX shareholders representing approximately 77% of voting shares.
- 5PHLX has agreed to a 'no-shop' provision with exceptions for superior unsolicited proposals.
- 6A termination fee of $22.82 million is stipulated for PHLX under specific circumstances, such as accepting a superior offer.
- 7The merger agreement includes a termination date of July 31, 2008.