WRAPUP 3-Nasdaq, D.Boerse eye shareholders in NYSE battle

* NYSE board rejected Nasdaq/ICE bid, backed D.Boerse

* Nasdaq, ICE not walking away, talking to shareholders

* NYSE, D.Boerse CEOs meeting shareholders in blitz

* Deutsche Boerse has no plans to raise bid-sources

* All eyes on April 28 NYSE shareholder vote on board
(Rewrites first paragraph with courting of shareholders, edits
throughout)

By Paritosh Bansal and Jonathan Spicer

NEW YORK, April 11 (Reuters) – Nasdaq OMX Group (NDAQ.O: Quote, Profile, Research)
and Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research) are wooing major NYSE Euronext
(NYX.N: Quote, Profile, Research) shareholders, as both exchanges stand by their bids for
the Big Board parent and dig in for a drawn-out battle.

Nasdaq and partner IntercontinentalExchange Inc (ICE.N: Quote, Profile, Research)
were unbowed on Monday after NYSE Euronext’s board rejected
their takeover offer in favor of a lower bid from Deutsche
Boerse.

Shareholders at the center of the increasingly bitter fight
were bracing for a bidding war and weighing a stark choice: The
short-term gain from Nasdaq’s higher but probably riskier offer
or leaving cash on the table for what could be a better
long-term fit with Deutsche Boerse.

While Nasdaq and ICE would carve NYSE Euronext in two, the
Deutsche Boerse combination would create the world’s top
exchange operator. The rival plans face considerable antitrust
hurdles in the United States or Europe, complicating things for
shareholders.

“It is really early on in this contest. There’s lots of
time for mischief,” said Thomas Caldwell, chairman and founder
of Toronto-based Caldwell Investment Management Ltd.

Nasdaq and ICE are not about to walk away from their $11.3
billion unsolicited offer, and they are working behind the
scenes to persuade NYSE shareholders to pressure the exchange’s
directors, according to people familiar with the matter.
[ID:nN11297238]

Deutsche Boerse, which in February struck a $10 billion
friendly deal to acquire NYSE Euronext, has no plans to raise
its offer, two other sources said. On Sunday, NYSE’s board
rejected the Nasdaq-ICE bid as “strategically unattractive,
with unacceptable execution risk.” [ID:nLDE73A0HZ]

The maneuvering points to a lengthy and public fight for
the parent company of the venerable New York Stock Exchange,
which also runs stock and futures markets across Europe.

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Breakingviews column: [ID:nN11294229]

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Graphic on exchanges: http://r.reuters.com/gab88r

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Some shareholders suggested Nasdaq and ICE first need to
counter the NYSE board’s unanimous and harshly worded rejection
of its offer, before they consider raising it.

There is also a relatively steep 250 million euro ($361
million) termination fee attached to the Deutsche Boerse-NYSE
Euronext plan.

“The NYSE has taken the first step, and that is casting
doubt. Nasdaq has got to convince people that this combined
NYSE-Nasdaq combo is going to be a real winner and a
powerhouse,” said Caldwell, who with the funds his firm manages
holds more than $100 million in NYSE Euronext stock.

NYSE Euronext is the biggest of the takeover targets now in
play as many of the world’s exchanges, including the London
Stock Exchange (LSE.L: Quote, Profile, Research) and Canada’s TMX Group (X.TO: Quote, Profile, Research), look to
band together.

CIRCLE APRIL 28

After the rejection, Nasdaq and ICE reaffirmed their bid
and chided NYSE for not discussing it further with them.

They are now trying to influence an annual meeting on April
28 in which NYSE shareholders are set to vote on their
directors, said one of the sources, who requested anonymity.
They hope institutional shareholders can convince the NYSE
board to talk to them about the offer.

In response, NYSE Euronext Chief Executive Duncan
Niederauer and his Deutsche Boerse counterpart, Reto Francioni,
are set to meet key NYSE shareholders this week to promote
their plan and to specify its expected cost savings, a person
familiar with the plan said. [ID:nWEN0901]

The CEOs plan to emphasize problems with the bid from
Nasdaq and ICE, including concerns over too much leverage, a
listings monopoly and likely job cuts, said the source.

Niederauer — who has not talked to his counterparts at
Nasdaq and ICE since they first informed him of their offer on
April 1 — on Sunday called the bid hollow and undefined.
[ID:nWEN0845]

Though NYSE’s board argued the all-share Deutsche Boerse
tie-up jibes with the company’s long-term plan, others argue
the higher cash-and-stock bid from Nasdaq and ICE could sway
shareholders focusing on a short-term gain.

“We don’t think many investors will find the differences in
strategic vision, financial leverage, employment targets, etc,
as sufficient reasons to decline the nominally superior Nasdaq
ICE offer,” Macquarie analyst Edward Ditmire wrote in a note.

That offer would give NYSE Euronext’s stock, options and
technology businesses to Nasdaq, while ICE would get its
profitable derivatives operations centered in London.

Amid the frenzy, Deutsche Boerse is preparing to file an
offer document with regulator BaFin as early as Tuesday, said
the two people familiar with the company’s thinking.

Deutsche Boerse shares rose on Monday as investors saw the
chances of a bidding war between rival suitors diminish. The
stock was up 0.9 percent in Frankfurt.

NYSE Euronext shares fell 2.9 percent and Nasdaq OMX shares
slipped 1.5 percent, handing back some of the big gains they
made when Nasdaq announced its bid.
(Additional reporting by Edward Taylor, Hakan Ersen, Harro Ten
Wolde and Anika Ross in Frankfurt; Writing by Jonathan Spicer;
Editing by Matthew Lewis, Steve Orlofsky and Tim Dobbyn)

WRAPUP 3-Nasdaq, D.Boerse eye shareholders in NYSE battle