The Leading Innovators in the Exchange Industry to Create
the World's Premier Exchange and Technology Company
Combination Recommended by both OMX and NASDAQ Boards and
Supported by Key OMX and NASDAQ Shareholders
Not For Release, Distribution or Publication Into or in
Australia, Canada, Japan or the Republic of South Africa
Part I - Summary
Joint Press Release, 25 May, 2007
The boards of directors of The NASDAQ Stock Market, Inc. ("NASDAQ")
and OMX AB (publ) ("OMX") jointly announce that they have entered
into an agreement (the "Transaction Agreement") to combine the two
companies (the "Combination" or the "Transaction"), creating the
world's premier exchange and technology company. The Combination will
create the largest global network of exchanges and exchange customers
linked by technology. The Combination will provide significant
benefits for customers, shareholders and other stakeholders in both
companies.
The new group, to be called The NASDAQ OMX Group (the "Combined
Group"), brings together two companies with a common culture and
vision of innovation, competitiveness and pioneering technological
expertise. NASDAQ OMX Group combines two highly complementary
businesses, uniting NASDAQ's leading global brand, highly efficient
electronic trading platform and track record of customer focused
innovation with OMX's global technology services platform and
customer base, efficient Nordic Exchange, derivatives capabilities
and track record of successful cross-border exchange integrations.
The Combination will be effected through a cash and stock tender
offer (the "Offer") by NASDAQ for all outstanding shares in OMX. The
consideration offered is equivalent to 0.502 new NASDAQ shares plus
SEK94.3 in cash for each OMX share. Based on NASDAQ's closing price
on 23 May, 2007, the Offer values OMX at SEK208.1 per share(1),
equivalent to SEK25.1 billion ($3.7 billion) and represents a premium
of 19 percent to the closing price of SEK174.5 per OMX share on 23
May, 2007, the last full trading day prior to the announcement of the
Offer and a premium of 25 percent to the volume weighted average
price of SEK165.9 per OMX share over the 20 trading days up to and
including 23 May, 2007.
Robert Greifeld, Chief Executive Officer of NASDAQ, commented:
"The future of exchanges is about technology, flexibility and scale.
NASDAQ and OMX together deliver all of these benefits. Our technology
leadership and track record in linking trading platforms means we
will offer issuers and investors unique benefits which were not
available in one company until now. This combination provides our
organizations with the ability to grow and accelerate the global flow
of equity capital. At the same time, it provides us with an excellent
platform for further expansion into derivatives and other asset
classes. Our organizations bring together very complementary
businesses, and we see many new opportunities for growth in an era of
unprecedented change and development for exchanges."
Magnus Bocker, Chief Executive Officer of OMX, commented:
"This combination creates a new leader in the exchange industry. By
utilizing the combined entities' joint expertise and competencies we
will create an outstanding platform for future growth. Issuers,
members, information vendors and investors on both NASDAQ and OMX
Nordic Exchange will all benefit from its new global context. The
combination also provides benefits for OMX's global technology
customer base, as it enables an increased focus on research and
product development in the most important and fastest growing areas
of the exchange technology market."
H. Furlong Baldwin, Chairman of NASDAQ, commented:
"We are each coming at this combination from a position of strength.
At NASDAQ, we are privileged to be partnering with such a reputable
institution as the OMX."
Urban Backstrom, Chairman of OMX, commented:
"For OMX, as a company that has always been known for its innovative
and ground-breaking approach within the exchange industry, this is
the natural next step. This will also strengthen the Nordic region as
a financial center."
The Combined Group will have 2,349 employees in 22 countries with pro
forma revenues for the financial year 2006 of more than $1.2 billion
(SEK8.3 billion). The relative values of the companies under the
terms of the Offer and based on NASDAQ's closing share price as of 23
May, 2007 are 58 percent NASDAQ and 42 percent OMX. The pro forma
market capitalization of The NASDAQ OMX Group will be approximately
$7.1 billion (SEK48.6 billion)(2), of which NASDAQ shareholders will
own approximately 72 percent and OMX shareholders will hold
approximately 28 percent as a result of the cash component of the
Offer.(3)
The Combined Group will be governed by representatives from both
NASDAQ and OMX under the leadership of Robert Greifeld, who will
serve as Chief Executive Officer and Magnus Bocker, who will serve as
President. The board of directors of the Combined Group will consist
of 15 members, including nine representatives from NASDAQ, five
representatives from OMX and the Chief Executive Officer of the
Combined Group. The NASDAQ OMX share will be listed on NASDAQ and on
OMX Nordic Exchange.
The Combination is unanimously recommended by the boards of directors
of each of OMX and NASDAQ. Investor AB, Nordea Bank AB and Magnus
Bocker, together representing approximately 16.6 percent of OMX's
current issued ordinary share capital, have entered into irrevocable
undertakings to accept the Offer and, if a mix and match facility is
included in the Offer, depending on the structure and the terms of
the facility, they will elect to receive all shares, subject to
proration. Olof Stenhammar & Company, representing approximately 1.6
percent of OMX's current issued ordinary share capital, has expressed
its support for the Combination and its intention to become a long
term shareholder in the Combined Group. In addition, Hellman &
Friedman, Silver Lake Partners, and Robert Greifeld have each agreed
to vote their shares in favor of certain matters related to the Offer
at the related NASDAQ shareholders' meeting, subject to the terms of
NASDAQ's certificate of incorporation.
The Combination will create:
* PREMIER GLOBAL EXCHANGE COMPANY: NASDAQ is the premier US
equities exchange, handling more shares and listing more
companies than any other US exchange. NASDAQ's open and
innovative market platform is the first choice for issuers
as well as investors. OMX Nordic Exchange is a highly
integrated, efficient equities and derivatives market for
leading European companies. Together, the NASDAQ and OMX
exchanges will process an average daily volume of 7.4 million
trades, representing a value of approximately $61 billion
(SEK418 billion). The NASDAQ and OMX exchanges will have
approximately 4,000 companies listed from 39 countries with
an aggregate market capitalization of approximately $5.5
trillion (SEK37.6 trillion);
* WORLD EXCHANGE TECHNOLOGY LEADER: OMX has been a pioneer in
creating a truly integrated cross-border stock market. OMX
also has created a world-renowned technology customer base
of equity, debt, and derivatives exchanges with 60 clients
in 50 countries worldwide, including Hong Kong, Singapore,
Australia, and the US. NASDAQ pioneered electronic trading,
and has continued to innovate over the last thirty years and
now has the fastest, most efficient trading platform in
the US. Together, the Combined Group will provide the
technology for the world's increasingly competitive and
demanding capital markets;
* Increased visibility and access to the global investment
marketplace for issuers: Issuers will be associated with an
innovative, future-focused company with blue-chip peers in
all industry sectors. Listed companies will have access to
a broad base of investors and deep pools of liquidity;
* A highly competitive derivatives market offering: OMX Nordic
Exchange is Europe's third largest marketplace for trading
and clearing equity-related derivatives. OMX's Nordic
distribution network is extended through an international
network of links to cooperating exchanges and clearinghouses.
OMX's technology solutions are also being used by other
leading derivatives exchanges around the world and will be
a key asset in the Combined Group's opportunities to capture
the high growth in derivatives trading globally;
* Enhanced strategic opportunities: The Combined Group will
be the partner of choice for future cooperation and
consolidation opportunities and have increased financial and
managerial resources. The combined entity will be well
positioned to drive organic growth and to continue to take a
proactive role in sector consolidation, in Europe, emerging
markets, the Americas and Asia; and
* Significant synergy potential: Both parties believe the
Combination will create substantial value for shareholders,
with total pre-tax annual synergies estimated at $150 million
(SEK1,025 million). Of this amount, $100 million (SEK683
million) constitutes estimated cost synergies and $50 million
(SEK342 million) estimated revenue synergies. Cost synergies
will be realized through the rationalization of IT systems
and data centres, rationalization of non-IT functions, and
reduced capital and procurement expenditure. Revenue
synergies will be achieved through the creation of deeper
liquidity pools, increased cross-border trading, increased
international listings, packaged data products and enhanced
technology sales.
The Combination is expected to create substantial value for
shareholders and to be accretive to earnings per share in 2009.
This summary should be read in conjunction with the text of the
attached full announcement.
A joint press and analyst conference regarding the Offer and
Combination of NASDAQ and OMX will be held today at 10.00am CET at
OMX Headquarters, Tullvaktsvagen 15, Stockholm. If you are unable to
attend the meeting in person, you can listen via:
Sweden: +46(0)850520270
UK: +44(0)2088179301
US: +1 7183541226
The presentation will also be webcast and can be found on
www.omxgroup.com and on www.nasdaq.com
In addition NASDAQ and OMX will host a second conference call for the
benefit of US based analysts and investors, to be held at 8.00am EDT:
Title: NASDAQ Conference Call
Domestic dial-in: 866-765-6327
International dial-in: +1 913-312-6621
And at 9.00am EDT, there will be a press call:
Title: NASDAQ Conference Call
Domestic dial-in: 800 810-0924
International Q&A: +1 913 981-4900
A presentation on the Combination will be available today on NASDAQ's
(www.nasdaq.com) and OMX's (www.omxgroup.com) websites.
For further information please contact:
OMX Contacts
Jonas Rodny, Senior Communications Manager
+46 8 405 72 67
jonas.rodny@omxgroup.com
Heidi Wendt, Vice President, Corporate Communications
+46 8 405 72 93
heidi.wendt@omxgroup.com
NASDAQ Contacts
Bethany Sherman, Senior Vice President, Corporate Communications
+1 212 401 8714
+1 917 836 1724
bethany.sherman@nasdaq.com
Vince Palmiere, Vice President, Investor Relations
+1 212-401-8742
vincent.palmiere@nasdaq.com
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this filing contains forward-looking
statements, which involve a number of risks and uncertainties. OMX
and NASDAQ caution readers that any forward-looking information is
not a guarantee of future performance and that actual results could
differ materially from those contained in the forward-looking
information. Such forward-looking statements include, but are not
limited to, statements about the benefits of the Offer, the proposed
business combination transaction involving NASDAQ and OMX, including
estimated revenue and cost synergies, the Combined Group's plans,
objectives, expectations and intentions and other statements that are
not historical facts. Additional risks and factors are identified in
NASDAQ's filings with the U.S. Securities Exchange Commission (the
"SEC"), including its Report on Form 10-K for the fiscal year ending
December 31, 2006 which is available on NASDAQ's website at
http://www.NASDAQ.com and the SEC's website at SEC's website at
www.sec.gov. and in OMX's filings with the Swedish Financial
Supervisory Authority (Sw. Finansinspektionen) (the "SFSA") including
its annual report for 2006, which is available on OMX's website at
http://www.omxgroup.com. The parties undertake no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future events or otherwise.
Notice to OMX shareholders
While the Offer is being made to all holders of OMX shares, this
document does not constitute an offer to purchase, sell or exchange
or the solicitation of an offer to purchase, sell or exchange any
securities of OMX or an offer to purchase, sell or exchange or the
solicitation of an offer to purchase, sell or exchange any securities
of NASDAQ in any jurisdiction in which the making of the Offer or the
acceptance of any tender of shares therein would not be made in
compliance with the laws of such jurisdiction. In particular, the
Offer is not being made, directly or indirectly, in or into
Australia, Canada, Japan or South Africa. While NASDAQ reserves the
right to make the Offer in or into the United Kingdom or any other
jurisdiction pursuant to applicable exceptions or following
appropriate filings and prospectus or equivalent document publication
by NASDAQ in such jurisdictions, pending such filings or publications
and in the absence of any such exception the Offer is not made in any
such jurisdiction.
Additional Information about this Transaction
In connection with the proposed business combination transaction, OMX
and NASDAQ expect that NASDAQ will file with the SEC a Registration
Statement on Form S-4 that will include a proxy statement of NASDAQ
that also constitutes a prospectus of NASDAQ. Investors and security
holders are urged to read the proxy statement/prospectus and any
amendments and other applicable documents regarding the proposed
business combination transaction if and when they become available
because they will contain important information. You may obtain a
free copy of those documents (if and when available) and other
related documents filed by NASDAQ with the SEC at the SEC's website
at www.sec.gov. The proxy statement/prospectus (if and when it
becomes available) and the other documents may also be obtained for
free by accessing NASDAQ's website at http://www.nasdaq.com and OMX's
website at http://www.omxgroup.com.
NASDAQ and its directors and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from NASDAQ stockholders in respect of the
transactions described in this communication. You can find
information about NASDAQ's executive officers and directors in
NASDAQ's definitive proxy statement filed with the SEC on April 20,
2007. You can obtain free copies of these documents and of the proxy
statement prospectus (when it becomes available) from NASDAQ by
accessing its website at http://www.nasdaq.com. Additional
information regarding the interests of such potential participants
will be included in the proxy statement/prospectus and the other
relevant documents filed with the SEC when they become available.
Part II - Full Announcement
The boards of directors of The NASDAQ Stock Market, Inc. and OMX AB
(publ) hereby jointly announce that they have entered into a
Transaction Agreement to combine the two companies, creating the
world's premier exchange and technology company. The Combination will
be effected through a cash and stock tender offer by NASDAQ for all
outstanding shares in OMX.
1. Background to and Reasons for the Offer and the Combination
between NASDAQ and OMX
The exchange industry is undergoing a period of unprecedented change.
These changes emanate from every aspect of our businesses, including
an increasingly competitive environment, significant opportunities
stemming from regulatory change, and the continued globalization of
the investment industry. NASDAQ and OMX each have the strategic
vision to be at the forefront of these changes, with a culture of
innovation and flexibility, and the ambition to be an agile and
global force in the rapidly growing and developing exchange industry.
Each of NASDAQ and OMX is an innovator of electronic trading with
technology as the foundation of their businesses. The Combination
brings together two companies with a common culture and vision of
innovation, competitiveness and pioneering technological expertise.
The NASDAQ OMX Group combines two highly complementary businesses,
uniting NASDAQ's leading global brand, highly efficient electronic
trading platform and track record of customer focused innovation with
OMX's global technology services platform and customer base,
efficient Nordic Exchange, multi-asset class capabilities and track
record of successful cross-border exchange integrations.
NASDAQ and OMX have been drivers of competition in the exchange
industry. NASDAQ has experienced 25 percent growth in matched trading
volume across all US equities in the past year as regulatory
developments have resulted in an increase in client demand for fast,
efficient electronic trading. OMX has experienced 38 percent average
annual growth in trading volumes in its cash markets business over
the past three years, has substantially increased its market share in
globally listed shares such as Nokia and Ericsson, and is providing
technology platforms to new players in established markets. The
Combination will leverage NASDAQ's and OMX's experiences to
capitalize on new opportunities in the increasingly competitive
exchange trading sector.
The Combined Group is expected to be the partner of choice for future
cooperation and consolidation opportunities with increased financial
and managerial resources. The Combined Group will be well positioned
to drive organic growth and to continue to take a proactive role in
sector consolidation, in Europe, emerging markets, the Americas and
Asia.
OMX has been a pioneer in creating a truly integrated cross-border
stock market. OMX has also created a world-renowned technology
customer base of equities, debt, and derivatives exchanges with 60
clients in 50 countries worldwide, including Hong Kong, Singapore,
Australia, and the US. NASDAQ pioneered electronic trading, and has
continued to innovate over the last thirty years and now has the
fastest, most efficient trading platform in the US. Together, we will
provide the technology for the world's increasingly competitive and
demanding capital markets. In addition, each company has a proven
track record of participation in industry consolidation with
successful integration of exchanges and trading platforms resulting
in strong revenue and cost synergies.
This compelling Combination forms:
* The premier global exchange company:
-- Together, NASDAQ and OMX will have an average daily
trading volume of 7.4 million trades, representing a value
of approximately $61 billion (SEK418 billion). NASDAQ and
OMX will have approximately 4,000 listed companies from
39 countries with an aggregate market capitalization of
approximately $5.5 trillion (SEK37.6 trillion);
-- The Combined Group will have many of the world's largest
companies listed on its marketplaces, with a leading market
share of listings in the technology, software,
telecommunication and pulp and paper industries worldwide.
Issuers will be associated with an innovative, future-focused
company with blue-chip peers in all industry sectors.
Listed companies will have access to a broad base of
investors and deep pools of liquidity; and
-- The combined liquidity pools, advanced speed of execution
and integrated cross-border trading capabilities will
provide issuers with increased visibility and access to
global equity capital.
* The world-leading provider of exchange technology:
-- OMX has been a pioneer in creating a truly integrated
cross-border stock market. OMX also has created a
world-renowned technology customer base of equity, debt
and derivatives exchanges with 60 clients in 50 countries
worldwide, including Hong Kong, Singapore, Australia,
and the US. NASDAQ pioneered electronic trading, and has
continued to innovate over the last thirty years and now
has the fastest, most efficient trading platform in the US.
Together, NASDAQ and OMX will provide the technology for
the world's increasingly competitive and demanding capital
markets;
-- OMX's extensive experience and expertise in providing
state-of-the-art exchange technology worldwide to a
sophisticated and global customer base, matched with
NASDAQ's technology excellence and global brand and
advanced services and support for innovative growth
companies provides a powerful opportunity to grow and
enhance the combined technology business; and
-- NASDAQ and OMX believe their focus on technology
leadership and the combination of their expertise and
brands will generate growth opportunities and additional
sales of technology and related services globally.
* A highly competitive derivatives market offering:
-- The OMX Nordic Exchange is Europe's third largest
marketplace for trading and clearing equity-related
derivatives with an annual trading volume of approximately
140 million equity related derivatives contracts. OMX's
Nordic distribution network is extended through an
international network of links to cooperating exchanges
and clearinghouses; and
-- OMX's technology solutions are also being used by other
leading derivatives exchanges around the world and will be
a key asset in the combined group's opportunities to
capture the high growth in derivatives trading globally.
* Enhanced data business with richer content and improved,
global distribution:
-- The Combined Group will leverage the strength of each
organization's distribution capabilities to broaden the
customer base for NASDAQ's and OMX's existing data products
and to provide enhanced data tailored with value-added
services to market participants;
-- Through NASDAQ's distribution network of over 250 data
vendors and OMX's over 100 data vendors, the Combined Group
will be able to enhance its global market transparency; and
-- The market data generated by the Combined Group will lever
its product expertise and develop innovative data products
and combined indices incorporating global complementary
NASDAQ and OMX stocks and derivatives.
* Enhanced strategic opportunities:
-- The Combined Group will be the partner of choice for future
cooperation and consolidation opportunities with increased
financial and managerial resources. The combined entity
will be well positioned to drive organic growth and to
continue to take a proactive role in sector consolidation,
in Europe, emerging markets, the Americas and Asia; and
-- Both NASDAQ and OMX will benefit from increased geographic,
product and sectoral diversification and each will benefit
from the other's strategic holdings in the industry.
* Significant synergy potential:
-- Both parties believe the Combination will create
substantial value for shareholders, with total pre-tax
annual synergies estimated at $150 million (SEK1,025
million). Of this amount, $100 million (SEK683 million)
constitutes estimated cost synergies and $50 million
(SEK342 million) estimated revenue synergies;
-- Cost synergies will be realized through the rationalization
of IT systems and data centres, rationalization of non-IT
functions, and reduced capital and procurement expenditure;
and
-- Revenue synergies will be achieved through the creation
of deeper liquidity pools, increased cross-border trading,
increased international listings, packaged data products
and enhanced technology sales.
-- Total pre-tax restructuring and revenue investment costs
are estimated at $150 million (SEK1,025 million) which
will be incurred in the two years following completion
of the Transaction.
Please see section 3 below for more information on synergies.
In summary, NASDAQ and OMX believe the Combined Group will create the
world's premier global exchange technology company.
2. Benefits to Customers and Other Stakeholders
Both NASDAQ and OMX support the view that capital markets growth and
development are promoted by transparent and efficient trading and
technology development. This is achieved through close cooperation
and collaboration between exchanges, issuers, members, investors and
regulators. The efficiencies resulting from the Combination will be
reflected in greater liquidity, reduced costs of trading, lower fees
for members and investors and lower cost of capital for issuers.
NASDAQ and OMX each have a track record of reducing operational costs
while simultaneously improving customer service.
Investors and members will benefit from deeper pools of liquidity and
higher trading volumes, a common IT infrastructure and interface for
both exchange companies, access to more products and positive
portfolio diversification.
Issuers will benefit from increased visibility and direct access to
the largest investor base in the world. Increased trading activity
and liquidity is also expected to reduce the cost of capital for
issuers.
Technology customers will continue to benefit from the market insight
the Combined Group derives from its direct participation in capital
markets. Combined expertise will accelerate the development of the
next generation of exchange technology at a time when investors and
members are increasingly demanding multi-asset class trading
platforms.
Data providers and vendors will receive richer content and improved
global distribution. The market data will allow NASDAQ OMX to
leverage its product expertise and develop a range of combined
indices incorporating complementary stocks and derivatives from
existing indices.
The Combination also provides a unique opportunity for the Nordic
markets by placing them at the heart of the rapid consolidation of
the exchange sector and becoming a key component of a world-leading
company in the exchange industry. The OMX regulatory model will be
unaffected by the Combination and the Combined Group will be
well-positioned as an attractive partner with the capacity to compete
effectively with other exchanges and continue consolidation across
Europe and globally.
3. Benefits to Shareholders
NASDAQ and OMX have significant experience in integrating exchanges
domestically and cross-border and delivering synergies. The
Combination is expected to create significant value for both
companies' shareholders through the realisation of pre-tax annual
cost and revenue synergies of approximately $150 million (SEK1,025
million) from 2010. Annual pre-tax cost synergies are estimated at
approximately $100 million (SEK683 million) in 2010. The Combination
is expected to be accretive to earnings per share in 2009.
Based on their successful integration track records, NASDAQ and OMX
believe that they will deliver the following cost synergies:
* IT synergies of $66 million (SEK451 million)
-- Integration of systems and platforms, merging the US operations of
the two companies, and leveraging the Genium platform
* Non-IT synergies of $34 million (SEK232 million)
-- Rationalization of overlapping functions, services, premises, and
reduction of capital and procurement expenditures
Both OMX and NASDAQ have established track records of delivering
increased revenues through their acquisitions of other exchanges and
trading platforms and valued-added service providers. Identified
pre-tax annual revenue synergies are expected to amount to $50
million (SEK342 million) achieved over three years.
* Trading and Information Services
-- Increase in cross-border trading, cross-selling of data and new
products and facilitation of cross membership
* Issuer Services
-- Attract new domestic and international listings as a result of the
Combined Group's enhanced value proposition including brand, sector
strengths and global reach. Introduce NASDAQ's issuer products and
services to OMX issuer customers
Non-recurring pre-tax costs to achieve these synergies are expected
to be $150 million (SEK1,025 million), which would be incurred in the
two years following completion of the Transaction.
4. Company Structure and Branding
The Combined Group will be structured as a US holding company, named
The NASDAQ OMX Group Inc., the shares of which will be listed on
NASDAQ and on OMX Nordic Exchange.
The Combined Group's headquarters will be located in New York, which
will also be the centre of operations for the group's US cash trading
business. The Combined Group's technology business and Nordic trading
business will continue to be managed as today. The Combined Group
will establish a new London presence to capitalize on international
growth opportunities.
The name and branding of the existing local exchanges within the
Combined Group will remain unchanged.
5. Governance and Management
The board of directors of the Combined Group will consist of 15
members, including nine representatives from NASDAQ, five
representatives from OMX and the Chief Executive Officer of the
Combined Group. The Chairman will be elected by the board of
directors of the Combined Group. The Deputy Chairman will be
designated by OMX.
It is proposed that Robert Greifeld, currently President and Chief
Executive Officer of NASDAQ, will serve as Chief Executive Officer of
the Combined Group. It is proposed that Magnus Bocker, currently
President and Chief Executive Officer of OMX, will become President
of the Combined Group.
The Combined Group will have a balanced management team and
organization reflecting the experience, expertise and activities that
each party brings to the Combination.
6. Employees
OMX and NASDAQ each operate strong exchange companies which are
recognized as being among the best for employees in the market.
Following the proposed Transaction, the Combined Group's strategy
will be to grow volume and broaden its customer base, combining the
strengths of both companies. In this context, the proposed
Transaction will create enhanced career opportunities for employees
of the Combined Group. All existing contracts will be honored.
Separately from the Offer, NASDAQ and OMX will offer participants of
OMX's existing stock option plans and share match plans fair
treatment in respect of their entitlements under the respective
plans.
7. Regulatory Issues
The Combination of NASDAQ and OMX will require consent or approval
from relevant financial supervisory authorities and competition
authorities.
Each of the Combined Group's markets will continue to be regulated in
accordance with local requirements. Specifically, OMX's markets will
continue to be regulated by their existing regulators, and the SEC
will continue to regulate NASDAQ's US markets only. The
Sarbanes-Oxley Act will continue to be exclusively applicable to
companies registered in the US.
8. Dividend Policy
The dividend policy of the Combined Group will be determined by the
board of the Combined Group.
9. Financial Effects of the Offer
The Transaction is expected to create substantial shareholder value
and be accretive to earnings per share in 2009.
10. Financing of the Offer
Assuming full acceptance of the Offer, approximately 60.6 million new
NASDAQ shares will be issued pursuant to the Offer and the total cash
consideration amount payable by NASDAQ to OMX shareholders will be
approximately $1.7 billion (SEK11.4 billion).
The Offer will not be subject to any conditions concerning the
availability of financing. Bank of America and JPMorgan Chase Bank,
N.A. (the "Banks") have agreed to finance the cash consideration of
the Offer pursuant to a commitment letter subject to all parties
entering into definitive documentation. However, if definitive
documentation is not entered into by the date on which the Offer is
launched, the Banks will finance the cash consideration of the Offer
by means of an interim loan agreement (the "Interim Loan Agreement")
which provides for committed funds and which is attached as an
exhibit to the commitment letter.
Drawdown pursuant to the Interim Loan Agreement is subject to the
conditions of the Offer being satisfied or waived (where such waiver
requires consents from the Banks in certain cases and under certain
circumstances). The additional conditions to drawdown under the
Interim Loan Agreement, which NASDAQ and its owners in practice
control, are essentially that:
* NASDAQ and its current subsidiaries execute collateral agreements and
guarantees, deliver stock certificates and stock powers and make
relevant filings and recordations;
* NASDAQ issues a promissory note in favor of each Bank evidencing such
Bank's loans;
* NASDAQ delivers documents evidencing the authority and capacity to
enter into the Interim Loan Agreement and pertaining documentation,
including legal opinions and certificate of good standing; and
* NASDAQ is not in breach of certain limited key representations and
events of default under the Interim Loan Agreement (including that the
documentation is binding and that NASDAQ is not insolvent or lacks
relevant authorizations).
11. Key Terms and Conditions of the Offer
11.1 The Offer
The Offer to the OMX shareholders consists of a mixture of cash and
new NASDAQ shares as consideration which values each OMX share at
SEK208.1 based on the assumptions set out in section 11.2 below. For
every 100 OMX shares tendered, each OMX shareholder will receive
SEK9,430 in cash and 50.2 new NASDAQ shares, equivalent to 0.502
NASDAQ shares and SEK94.3 in cash per OMX share.
NASDAQ is offering each OMX shareholder: (4)
-- In respect of approximately 45.3 percent of the number of OMX shares
tendered by such shareholder: SEK208.1 per OMX share in cash (the
"Cash Consideration"); and
-- In respect of the remaining approximately 54.7 percent of the number
of OMX shares tendered by such shareholder: 0.918 new NASDAQ shares
(the "Share Consideration"), equivalent to a value of SEK208.1 per OMX
share.
As an alternative, OMX shareholders with 200 or fewer OMX shares are
entitled to elect to receive a guaranteed Cash Consideration of
SEK208.1 per OMX share.
NASDAQ reserves the right to introduce a mix and match facility which
will enable OMX shareholders to elect to tender a higher proportion
of their OMX shares in return for the Cash Consideration or to tender
a higher proportion of their OMX shares in exchange for the Share
Consideration, subject to matching elections by other OMX
shareholders. The total number of new NASDAQ shares to be issued
under the Offer would not be varied as a result of elections made
under such mix and match facility. If NASDAQ introduces a mix and
match facility, the details of such facility will be presented in the
offer document.
No commission will be charged in respect of settlement of the Offer.
NASDAQ does not own any shares or other financial instruments in OMX.
11.2 Offer Value and Premium
Based on a closing price for NASDAQ shares of $33.19 on NASDAQ on 23
May, 2007 and a SEK/$ exchange rate of 6.83, the Offer value and
Offer premium are the following:
* The Offer values each OMX share at approximately SEK208.1;
* The Offer values the whole of the issued share capital of OMX at
approximately SEK25.1 billion ($3.7 billion);
* The Offer represents:
-- A premium of 19 percent relative to SEK174.5, the closing price on
23 May, 2007, the last full trading day prior to the announcement of
the Offer and a SEK/$ exchange rate of 6.83 on 23 May, 2007; and
-- A premium of 25 percent to the volume weighted average price of
SEK165.9 per OMX share over the 20 trading days up to and including
23 May, 2007, the last full trading day prior to the announcement of
the Offer.
Assuming full acceptance of the Offer, a maximum amount of
approximately SEK11.4 billion ($1.7 billion) in cash is payable and a
maximum number of approximately 60.6 million new NASDAQ shares will
be issued under the Offer.
11.3 Fractional Entitlements
Fractions of the new NASDAQ shares will not be issued to accepting
OMX shareholders. Such fractions will be sold in the market and the
net proceeds will be distributed proportionally between the OMX
shareholders concerned.
11.4 Completion Conditions of the Offer
Completion of the Offer is conditional upon:
1. That the Offer is accepted to such an extent that NASDAQ becomes the
owner of shares representing more than 90 percent of the outstanding
shares of OMX on a fully diluted basis;
2. That NASDAQ's shareholders approve the issuance of the new NASDAQ
shares in connection with the Offer by the required vote under the
applicable laws and NASDAQ exchange rules;
3. That the new NASDAQ shares to be issued under the Offer are approved
for listing on the NASDAQ National Market;
4. That the recommendation by the board of directors of OMX that OMX
shareholders accept the Offer has not been withdrawn;(5)
5. That NASDAQ's Registration Statement on Form S-4 in the United States,
which will register the new NASDAQ shares, has become effective under
the Securities Act of 1933, as amended, and is not the subject of any
stop order or proceeding seeking a stop order by the Securities and
Exchange Commission;
6. That all necessary approvals from public authorities or other
regulatory bodies, including competition authorities and financial
supervisory authorities, in connection with the Offer, its
implementation or the acquisition of OMX by NASDAQ, have been obtained
on terms reasonably acceptable to NASDAQ, or applicable deadlines or
waiting periods in relation thereto have expired or been terminated,
and there being no notice of any intention to revoke, suspend,
restrict, impose any conditions in relation to, vary, amend or not
renew any authorizations, certificates, licenses, permissions or
approvals of OMX or any of its subsidiaries;
7. That neither the Offer, its implementation nor the acquisition of all
outstanding shares in OMX, has been rendered partially or wholly
impossible or significantly impeded as a result of legislation,
regulation, any decision of court, public authority or other
regulatory body, or as a result of other comparable measures beyond
NASDAQ's control in Sweden, the United States or elsewhere;
8. That no material adverse change in OMX's financial position or
operations has occurred after the announcement of the Offer; such
material adverse change that materially adversely affects, or could
reasonably be anticipated to have such effect on, OMX's liquidity,
sales, results or equity and which could not have been reasonably
known or anticipated by NASDAQ at the time of the announcement of the
Offer; provided, however, that the following shall not be considered
in determining whether such a material adverse change has occurred:
(A) any change or development in economic, business, political or
securities markets conditions generally (including any such change or
development resulting from acts of war, terrorism or natural
disasters), except that any change or development that, relative to
other participants in OMX's industry, disproportionately impacts the
liquidity, sales, results or equity of OMX shall be so considered in
determining whether a material adverse change has occurred, (B) any
change or development to the extent resulting from the execution or
announcement of the Offer or the transactions contemplated thereby, or
(C) any changes in laws, rules or regulations.
9. That no information made public by OMX or disclosed by OMX to NASDAQ
is materially inaccurate, incomplete or misleading, and that OMX has
not failed to make public any material information which should have
been made public by it.
NASDAQ reserves the right to withdraw the Offer in the event that it
is clear that any of the above conditions is not fulfilled or cannot
be fulfilled. However, the Offer may only be withdrawn with reference
to the non-fulfillment of the conditions 3-9 above if the
non-fulfillment is of material importance for NASDAQ's acquisition of
the Shares in OMX.
NASDAQ reserves the right to waive, in whole or in part, one, several
or all of the conditions set out above, including with respect to
condition 1 above, to complete the Offer at a lower level of
acceptance; provided, however, that any waiver of conditions 1, 3 or
6 shall require the prior written consent of OMX (such consent not to
be unreasonably withheld or delayed), except that no waiver of
condition 1 shall require such prior written consent of OMX if, when
the condition is waived, the Offer is accepted to such an extent that
NASDAQ becomes the owner of shares representing at least 67 percent
of the outstanding shares of OMX on a fully diluted basis.
11.5 Transaction Agreement between NASDAQ and OMX
NASDAQ and OMX have entered into a Transaction Agreement in
connection with the Offer. The Transaction Agreement contains, inter
alia, provisions on cooperation in regard of the offer document, the
registration statement and filings with the relevant authorities,
provisions on corporate governance and organizational issues post
closing of the Transaction and provisions on treatment of OMX
employees' option and share match plans. The Transaction Agreement
also contains customary provisions on board recommendations, so
called non-solicitation and related provisions. The full Transaction
Agreement will be available in the offer document.
11.6 Irrevocable Undertakings from OMX Shareholders
Investor AB, Nordea Bank AB and Magnus B"cker, together representing
approximately 16.6 percent of OMX's current issued ordinary share
capital, have entered into irrevocable undertakings to accept the
Offer and, if a mix and match election facility is included in the
Offer, depending on the structure and the terms of the facility, they
will elect to receive all shares, subject to proration. The
irrevocable undertakings will or could lapse in certain circumstances
including:
* a third party offer being made for the OMX shares which corresponds to
an Offer value in SEK equal to or exceeding SEK220 per OMX Share;
* the value of the Offer in SEK falls below SEK190 following the date of
this announcement;
* if the Registration Statement on Form S-4 in relation to the Offer is
not completed and submitted to the Securities and Exchange Commission
on or before 15 August, 2007;
* if NASDAQ would waive the acceptance level condition and declare the
Offer unconditional without the consent from the shareholder making the
undertaking, and at the time of such waiver NASDAQ has not reached an
acceptance level of 2/3 of the OMX shares (including shares subject to
irrevocable undertakings, whether yet delivered for acceptance or not);
* if the recommendation of the Offer by the board of OMX is withdrawn;
* if the Offer has not been declared unconditional before 15 December,
2007; or
* if a material adverse change in NASDAQ's financial position or
operation that could have a material adverse effect on NASDAQ's
financial position, liquidity, sales, results, equity, or stock price
becomes known to the shareholder making the undertaking.
11.7 Approval from NASDAQ Shareholders
Hellman & Friedman, Silver Lake Partners, and Robert Greifeld have
each agreed to vote their shares in favor of certain matters related
to the Offer at the related NASDAQ shareholders' meeting, subject to
the terms of NASDAQ's certificate of incorporation.
11.8 Board Recommendations
The board of directors of OMX unanimously recommends to OMX
shareholders to accept the Offer. The board of directors of OMX has
received fairness opinions from Morgan Stanley & Co. Limited ("Morgan
Stanley") and Credit Suisse, concluding that, in their opinion and
subject to the qualifications and assumptions set out therein, the
Offer consideration is fair from a financial point of view to the
shareholders of OMX. The full opinion of the board and the fairness
opinions will be included in the offer document.
The board of directors of NASDAQ consider the terms of the Offer to
be in the best interests of NASDAQ and the NASDAQ shareholders as a
whole, and unanimously recommends that the NASDAQ shareholders vote
in favor of the resolutions to be proposed at the shareholders'
meeting of NASDAQ to be held in connection with the Offer.
11.9 Due Diligence
After approval by the board of directors of OMX, NASDAQ has conducted
a limited due diligence review of certain business, financial and
legal information relating to OMX.
OMX has conducted a limited due diligence review of certain business,
financial and legal information relating to NASDAQ.
11.10 Governing Law
The Offer shall be governed by and construed in accordance with the
laws of Sweden. The Takeover Rules issued by the Stockholm Stock
Exchange and the Swedish Securities Council's rulings regarding
interpretation and application of the Takeover Rules (including its
rulings with respect to the Rules on Public Offers for the
Acquisition of Shares issued by the Swedish Industry and Commerce
Stock Exchange Committee) apply in relation to the Offer.
Furthermore, in accordance with the Swedish Takeover Act, NASDAQ has
contractually agreed with the Stockholm Stock Exchange to comply with
the foregoing and to submit to any sanctions imposed by the Stockholm
Stock Exchange upon breach of the Takeover Rules. The courts of
Sweden shall have exclusive jurisdiction over any dispute arising out
of or in connection with the Offer and the City Court of Stockholm
shall be the court of first instance.
12. Listing of and Trading in the NASDAQ OMX share
The NASDAQ OMX share will be listed on NASDAQ and on the OMX Nordic
Exchange.
Further details on listing, admission to trading and dealings in the
NASDAQ share will be included in the offer document.
13. Compulsory Acquisition and Delisting
In the event that NASDAQ (whether in connection with the Offer or
otherwise) obtains more than 90 percent of OMX's issued share capital
on a fully diluted basis, NASDAQ intends to commence a compulsory
acquisition procedure under the Swedish Companies Act to acquire all
remaining OMX shares. In connection therewith, NASDAQ intends to
promote a de-listing of the OMX share from the Stockholm Stock
Exchange and the marketplaces where there is a secondary listing of
the OMX share.
14. Indicative Timetable
An offer document regarding the Offer and a retail shareholder
information brochure will be published. These documents are expected
to be published during the third quarter of 2007.(6)
The acceptance period will commence promptly following the publishing
of the offer document, and will last for no less than 20 business
days. NASDAQ reserves the right to extend the acceptance period and
to defer the date for settlement subject to applicable law and the
Transaction Agreement.
The completion of the Offer is conditional upon the satisfaction of
certain conditions as set out in section 11.4 above, including
expiration of the Hart-Scott-Rodino waiting period and receipt of
anti-trust and full regulatory approvals and NASDAQ shareholder
approval. NASDAQ and OMX expects the Offer is to be completed by
year-end 2007. Further details regarding the publication of these
documents and the timetable for the Offer period will follow in a
separate press release in due course.
15. Advisors
JPMorgan is acting as exclusive financial advisor to NASDAQ in
relation to the transaction and will not be responsible for providing
the protections afforded to their client to any other person.
Advokatfirman Cederquist and Skadden, Arps, Slate, Meagher & Flom LLP
are serving as legal advisors to NASDAQ in relation to the
Transaction. Morgan Stanley, Lenner & Partners and Credit Suisse are
acting as financial advisors to OMX in relation to the transaction
and will not be responsible for providing the protections afforded to
their client to any other person. Advokatfirman Vinge and Cleary
Gottlieb Steen & Hamilton LLP are serving as legal advisors to OMX in
relation to the Transaction.
16. Information on OMX
OMX is a leading expert in the exchange industry. Through the Nordic
Exchange, OMX offers access to approximately 80 percent of the Nordic
and Baltic securities market. The Nordic Exchange is a term used for
marketing purposes and is not a legal entity. It describes the common
offering from the Helsinki Stock Exchange, Copenhagen Stock Exchange,
Stockholm Stock Exchange, Iceland Stock Exchange, Tallinn Stock
Exchange, Riga Stock Exchange and Vilnius Stock Exchange. OMX
integrated technology solutions cross the transaction chain enabling
efficient securities transactions for over 60 exchange organizations
in more than 50 countries. OMX is a Nordic Large Cap company in the
Financials sector on the OMX Nordic Exchange.
OMX key statistics as of Q1, 2007:
* 801 Listed Companies
* Domestic market capitalization: $1.2 trillion
* Total market capitalization: $1.3 trillion
* Average daily trades cash market: 0.2 million
* Average daily number of derivatives contracts: 0.7 million
* Average daily value traded: $7 billion
* 67,200 information terminals for professionals
* 27,800 information terminals for non-professionals
* Technology contracts: 60+
17. Information on NASDAQ
NASDAQ is the largest US electronic stock market. With approximately
3,200 companies, it lists more companies and, on average, trades more
shares per day than any other US market. It is home to companies that
are leaders across all areas of business including technology,
retail, communications, financial services, transportation, media and
biotechnology. NASDAQ is the primary market for trading NASDAQ-listed
stocks.
NASDAQ key statistics as of Q1, 2007:
* 3,181 Listed Companies
* IPOs: 37 / $6.3 billion of raised value
* Domestic market capitalization: $3.9 trillion
* Total market capitalization: $4.2 trillion
* Average daily trades: 7.2 million
* Average daily value traded: $54 billion
* 400,000 information terminals for professionals
* 1.7 million information terminals for non-professionals
* Technology contracts: 1
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this filing contains forward-looking
statements, which involve a number of risks and uncertainties. OMX
and NASDAQ caution readers that any forward-looking information is
not a guarantee of future performance and that actual results could
differ materially from those contained in the forward-looking
information. Such forward-looking statements include, but are not
limited to, statements about the benefits of the Offer, the proposed
business combination transaction involving NASDAQ and OMX, including
estimated revenue and cost synergies, the Combined Group's plans,
objectives, expectations and intentions and other statements that are
not historical facts. Additional risks and factors are identified in
NASDAQ's filings with the U.S. Securities Exchange Commission (the
"SEC"), including its Report on Form 10-K for the fiscal year ending
December 31, 2006 which is available on NASDAQ's website at
http://www.NASDAQ.com and the SEC's website at SEC's website at
www.sec.gov. and in OMX's filings with the Swedish Financial
Supervisory Authority (Sw. Finansinspektionen) (the "SFSA") including
its annual report for 2006, which is available on OMX's website at
http://www.omxgroup.com. The parties undertake no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future events or otherwise.
Notice to OMX shareholders
While the Offer is being made to all holders of OMX shares, this
document does not constitute an offer to purchase, sell or exchange
or the solicitation of an offer to purchase, sell or exchange any
securities of OMX or an offer to purchase, sell or exchange or the
solicitation of an offer to purchase, sell or exchange any securities
of NASDAQ in any jurisdiction in which the making of the Offer or the
acceptance of any tender of shares therein would not be made in
compliance with the laws of such jurisdiction. In particular, the
Offer is not being made, directly or indirectly, in or into
Australia, Canada, Japan or South Africa. While NASDAQ reserves the
right to make the Offer in or into the United Kingdom or any other
jurisdiction pursuant to applicable exceptions or following
appropriate filings and prospectus or equivalent document publication
by NASDAQ in such jurisdictions, pending such filings or publications
and in the absence of any such exception the Offer is not made in any
such jurisdiction.
Additional Information About this Transaction
In connection with the proposed business combination transaction, OMX
and NASDAQ expect that NASDAQ will file with the SEC a Registration
Statement on Form S-4 that will include a proxy statement of NASDAQ
that also constitutes a prospectus of NASDAQ. Investors and security
holders are urged to read the proxy statement/prospectus and any
amendments and other applicable documents regarding the proposed
business combination transaction if and when they become available
because they will contain important information. You may obtain a
free copy of those documents (if and when available) and other
related documents filed by NASDAQ with the SEC at the SEC's website
at www.sec.gov. The proxy statement/prospectus (if and when it
becomes available) and the other documents may also be obtained for
free by accessing NASDAQ's website at http://www.nasdaq.com and OMX's
website at http://www.omxgroup.com.
NASDAQ and its directors and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from NASDAQ stockholders in respect of the
transactions described in this communication. You can find
information about NASDAQ's executive officers and directors in
NASDAQ's definitive proxy statement filed with the SEC on April 20,
2007. You can obtain free copies of these documents and of the proxy
statement prospectus (when it becomes available) from NASDAQ by
accessing NASDAQ's website. Additional information regarding the
interests of such potential participants will be included in the
proxy statement/prospectus and the other relevant documents filed
with the SEC when they become available.
(1) Based on NASDAQ's closing share price of $33.19 on 23 May, 2007, the
last full trading day prior to the announcement of the Offer, and a
SEK/$ exchange rate of 6.83
(2) Based on NASDAQ's closing price of $33.19 as of 23 May, 2007 and
approximately 60.6 million new NASDAQ shares issued in the Offer
assuming full subscription of the Offer by OMX shareholders
(3) Pro forma ownership assumes full subscription of the Offer
(4) The value of the Cash Consideration and Share Consideration based on
the assumption set out in 11.2
(5) The Swedish Securities Council (Sw Aktiemarknadsnamnden) has in the
ruling AMN 2007:18 stated completion conditions of this kind are
consistent with good stock market practice under certain
circumstances. NASDAQ and OMX agree that such circumstances are at
hand.
(6) The Swedish Securities Council (Sw "Aktiemarknadsnamnden") has
extended the time period for preparing and filing the Swedish offer
document from 4 weeks to 10 weeks due primarily to extensive filing
requirements in the US, see ruling AMN 2007:19. Further extensions
may be granted if necessary
NDAQF
