Mergers News

Nasdaq in talks to buy Phila.Exchange-report

(Corrects garbled analyst quote, last paragraph)

NEW YORK, April 10 (Reuters) - Nasdaq Stock Market Inc. NDAQ.O is in talks to buy the Philadelphia Stock Exchange to gain a stake in the fast-growing options business, according a report on the Wall Street Journal Web site on Tuesday.

The report, citing unnamed sources, said the top U.S. electronic stock exchange had discussed a link up with the regional exchange for months, but a deal is not expected to be reached any time soon and may take weeks to put together.

Nasdaq chief executive Robert Greifeld announced plans last September to launch an options business by 2007. But the exchange would enter a crowded market for options trading, analysts have said. There are currently six options exchanges in the U.S.

The report said the Philadelphia Stock Exchange could be valued at $250 million to $300 million, according to followers of the exchange.

“Nasdaq most likely has the financial flexibility to do an all cash deal, but we would expect they may try to include an equity component,” Keefe, Bruyette & Woods analyst Richard Herr said.

Nasdaq launched a hostile bid to purchase the London Stock Exchange LSE.L in December 2006, which was rejected by LSE shareholders.

A Nasdaq spokeswoman declined comment.

“We talk to a large number of people and have not made a deal,” a Philadelphia Stock Exchange spokeswoman said. “We are still exploring an IPO.”

Herr added, “I don’t think the Philadelphia Exchange would be the only one that Nasdaq would be in talks with for a presence in (the) options (market).”

((Reporting by Jonathan Keehner and Kenneth Li, editing by Gary Hill; Reuters Messaging:; +646-223-6224; e-mail: h Keywords: PHILADELPHIASTOCKEXCHANGE NASDAQ/

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