NYSE Euronext CEO Duncan Niederauer may find it hard to convince shareholders his $10 billion friendly merger with Deutsche Boerse AG beats a rival $11.2 billion offer, CME Group Inc's chief executive said on Thursday. At an annual meeting on Thursday, Niederauer faced calls from shouting shareholders that he should open talks with Nasdaq OMX Group and IntercontinentalExchange Inc.
NYSE Euronext has twice rejected the competing offer without any talks.
"Any time you are defending a large transaction where you've got a competing bid or bidder, that makes it even more challenging than it otherwise would be," Donohue told Reuters in an interview on Thursday.
"As management and as a board, our responsibility always is to make sure we are maximising value for shareholders, and that isn't always a straightforward or simple function of just what the value of the offer, or competing offer, appears to be."
Donohue speaks from experience. His 2006 agreement to buy the Chicago Board of Trade for about $8 billion was nearly derailed when ICE stepped in with a $9.9 billion competing bid.
Like Niederauer today, Donohue and CBOT CEO Bernard Dan argued their deal was better for shareholders in the long-term, would generate higher earnings, and would deliver bigger savings.
"We were able to ultimately gain the support from customers and shareholders for the combination that we ultimately did achieve, despite the fact that we had an aggressive, competing interloper in the process," Donohue said.
In the end, what clinched the deal for CME was its decision to offer more stock to CBOT shareholders so that the dollar value of its deal matched ICE's. Asked if Deutsche Boerse would need to raise its bid as well, Donohue declined to comment.