Feb 13 Nasdaq OMX Group would not gain
any advantages by becoming a private company, and the exchange
operator does not want to be highly leveraged, Chief Financial
Officer Lee Shavel said on Wednesday, but he did not dismiss the
Private equity firm Carlyle Group recently approached
Nasdaq about taking the exchange operator private, but the talks
fell apart over a disagreement on price, sources familiar with
the deal said on Monday.
Nasdaq can not comment on "rumors or speculation," Shavel
said at the Credit Suisse Financial Services Forum in Miami. But
speaking hypothetically, he said Nasdaq believes there is plenty
of value in the company to be unlocked, and that others likely
see that as well.
"We would be disappointed if the private equity community
didn't from time to time see an opportunity in us as an
undervalued company and express interest," he said.
For a time, Nasdaq was a private company, and counted PE
firms Silver Lake and Hellman & Friedman as investors, Shavel
Nasdaq shares began trading on the OTC Bulletin Board in
2002 not long after being spun out of what is now the Financial
Industry Regulatory Authority (FINRA). Its shares were listed on
the Nasdaq Stock Market in 2005 following a offering of
Shavel took aim at some reports that questioned the idea of
exchanges with listing businesses going private, given that they
regularly sing the virtues of the public market.
"We would never presume to say to a company that their
decision to be public or private should be driven by whatever
Nasdaq chooses to do in their own unique circumstances," he
He also said Nasdaq has strong, stable cash flows, which
could be leveraged if necessary. PE firms regularly do leveraged
buyouts, using the cash flows of the target firm to secure and
repay the debt.
The average amount of leverage that PE firms generally add
to target firms is similar to the amount of leverage Nasdaq had
when it was private, and regulators would not likely have a
problem if it had a similar level again, Shavel said.
But Nasdaq does not think leveraging up would generate
substantial value for its shareholders at this point, he added.
And even if going private were an option, it might not be
the best one at this point.
"It doesn't open up any additional doors to us that aren't
available to us as a public company," Shavel said.
Questions of Nasdaq possibly seeking a strategic partner
surfaced after rival NYSE Euronext announced in December
it was being bought by IntercontinentalExchange Inc in a
cash and stock deal valued at $8.2 billion.