Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Nasdaq To Acquire ESpeed Platform From BGC Partners - Update

RELATED NEWS
Trade NDAQ now with 

Exchange operator The Nasdaq OMX Group Inc. (NDAQ: Quote), Monday agreed to acquire the eSpeed platform business from BGC Partners Inc. (BGCP: Quote) in a deal valued about $1.23 billion. eSpeed is an on-the-run, U.S. Treasury fully electronic trading platform, which is expected to help Nasdaq diversify into the electronic fixed income business.

Shares of BGC Partners surged more than 40 percent in after-hours trade, on the news.

As per the terms, Nasdaq will pay $750 million in cash plus an earn-out payment of up to $484 million of NASDAQ common stock to be paid ratably over 15 years.

Nasdaq believes the deal will be accretive to its earnings within the first twelve months after closing, excluding transaction-related costs, and generate attractive returns on capital. The deal is expected to close sometime mid-2013.

"We view the eSpeed platform as a compelling extension of NASDAQ OMX's strategic direction as eSpeed is a major player in the U.S. Treasury market...," said Bob Greifeld, chief executive officer of NASDAQ.

Nasdaq expects strong growth in U.S. Treasury volumes due mainly to stability in the issuance of new Treasuries, the continued electronification of the U.S. Treasury market, and the resolution of fiscal uncertainty.

BGC will sell to NASDAQ OMX certain assets, including the eSpeed brand and contracts comprising the fully electronic portion of BGC's benchmark, on-the-run, U.S. Treasury brokerage, market data and co-location service businesses. These assets generated revenues of about $100 million in 2012. eSpeed will be a part of Nasdaq's Transaction Services business.

BGC has agreed not to compete with NASDAQ OMX in fully electronic, on-the-run, benchmark U.S. Treasury Notes and Bonds for 3 years following the close of the deal. BGC will retain all of its other voice, hybrid, and fully electronic trading, market data, and software businesses.

BGC said the one-time gain related to the $750 million payment is expected to be accretive to its net earnings per share upon closing, but will not be included in the company's results for distributable earnings.

Shares of Nasdaq closed Monday at $32.01, down 0.90%.

BGC Partners closed at $3.85, down 7.45%, on a volume of 2.7 million shares. In after hours, the stock gained $1.65 or 42.86%.

Register
To receive FREE breaking news email alerts for Nasdaq OMX Group Inc. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
A ban on athletes using stamina-boosting gases - xenon and argon - came into effect on Monday. The World Anti-Doping Agency (WADA) said Hypoxia-Inducible Factor (HIF) activators Xenon and Argon have been added to the 2014 List of Prohibited Substances and Methods List following the required three-month notice period and UNESCO's communication to all States Parties. A recommendation to revise the British manufacturing growth eased further in August to its lowest level in 14 months as output and demand increased at slower rates, survey results from Markit Economics showed Monday. The Markit/CIPS Purchasing Managers' Index dropped to 52.5 from a revised 54.8 in July. Economists had expected the score to fall to 55.1 from July's original figure of 55.4. Consumers spent less in July than in the previous month, a surprise retreat that complicates the prevailing belief that the U.S. economic situation is improving. Along with the unexpected drop in spending, government figures released on Friday showed that incomes rose at a slower pace in July than in the previous month. Meanwhile, data on prices indicated that inflation pressures remain tame.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.