Carlyle Group in talks with US exchange owner Nasdaq OMX

PUBLISHED : Wednesday, 13 February, 2013, 12:00am
UPDATED : Wednesday, 13 February, 2013, 5:14am

Nasdaq OMX Group's talks with Carlyle Group about taking the company private are spurring speculation among investors and analysts that a US$50-billion wave of attempted exchange deals in the past three years is not over.

The discussions between the second-largest owner of US exchanges and Carlyle broke down over price, according to a person with knowledge of the matter.

The company trades at the second-cheapest multiple relative to earnings among 25 exchanges after US equity trading volume dropped for a third year, according to data.

Exchange companies have been the subject of takeover bids amid shrinking profits for securities trading, leading to IntercontinentalExchange's offer for the NYSE Euronext last month and Hong Kong Exchanges and Clearing's purchase of the London Metal Exchange.

Nasdaq chief executive Robert Greifeld has been reorganising business units and reducing expenses after the company's US cash equity trading revenue fell 21 per cent last year.

"You can see the momentum building up again," Sang Lee, managing partner at Aite Group in Boston, said. "It's about firms trying to diversify their revenue and firms trying to expand their global footprint. It's tough for a public company to set out long-term goals and try to meet those goals without getting hammered every quarter."

Nasdaq shares rose 3.1 per cent to a four-year high of US$30.38 on Monday. The shares have soared 22 per cent this year.

NYSE Euronext is up 51 per cent since announcing its deal with IntercontinentalExchange in December.

The talks were initiated by Carlyle chief financial officer Adena Friedman, who left Nasdaq in 2011 as chief financial officer and head of corporate strategy, said the source, who asked not to be identified because the meetings were private.

Rob Madden, a spokesman for Nasdaq OMX, declined to comment, saying the company does not speak about "rumours or speculation". Carlyle spokesman Randy Whitestone also declined to comment.