Nasdaq hasn't lost its appetite
The exchange still wants a presence in London. Nordic exchange owner OMX could help it.
NEW YORK - Nasdaq Stock Market Inc. chief executive officer Robert Greifeld finally came through with a major deal to move into Europe, but the agreement with Nordic exchange owner OMX hasn't curbed his appetite for a presence in London.
It might appear that Nasdaq and OMX might make for strange bedfellows, considering that the Stockholm-based bourse operator is only Europe's fifth-largest. But they have one very compelling thing in common: Each has made a run at buying the London Stock Exchange.
The Nasdaq was turned down by LSE shareholders earlier this year when it attempted a hostile takeover bid, but the U.S. company still controls a 30 percent stake in the British exchange. OMX unsuccessfully attempted to buy the London market in 2001.
Both companies made it clear Friday that they not only want a presence in Europe's financial capital, but that they also will keep looking for acquisitions. It might be the only way to outmaneuver the rival New York Stock Exchange, which became the world's largest financial exchange through this year's $14 billion acquisition of Paris-based Euronext.
"What's been impressive about OMX is that they think in a very competitive way, they think strategically," Greifeld said during a conference call with reporters after the $3.7 billion deal was announced.
"The Nasdaq has always had to compete for every scrap of progress," he said. "This new organization has in its DNA the desire to compete. It does not know any other way."
This competitiveness could translate into yet another bid for the London Stock Exchange, analysts said. But this time, the companies would pitch a deal to be an integral part of a much bigger exchange.
A spokesman for the LSE would not comment about Nasdaq's acquisition of OMX. But LSE chief executive Clara Furse, who has rejected five takeover attempts in two years, has in the past emphasized the stand-alone growth prospects of the London market.
Greifeld and the chief executive of OMX, Magnus Bocker, have also sent another clear message to the LSE: No acquisition is needed to establish a presence in London. In fact, they could easily become one of the LSE's fiercest competitors.
Nasdaq OMX might lend its technology and experience in helping a group of seven investment banks establish a pan-European trading platform called Project Turquoise. It is one of several plans floating to set up alternative trading systems as Europe's financial markets become more open.
OMX, founded in the 1980s to introduce trading in option contracts in Sweden, has transformed itself into more than a stock exchange. Its electronic trading platform - considered to be among the world's best - has been sold to some 60 other exchanges around the world.
The day is approaching when investors in the United States will be able to easily buy and sell shares, options and commodities that trade globally. And stiffer competition means exchanges will be forced to keep fees lower.
