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Nasdaq Buys Instinet ExchangePOSTED April 23, 2005 NEW YORK, NY -- Just days after the New York Stock Exchange said it would merge with Archipelago, the Nasdaq is acquiring Instinet for almost $1.9 billion. The Nasdaq deal also includes a plan to sell Instinet's Institutional Broker division to Silver Lake Partners, a private equity firm. As a result of these transactions, NASDAQ will own INET ECN. Instinet has also entered into a definitive agreement to sell its Lynch, Jones & Ryan (LJR) subsidiary to Bank of New York prior to closing of the Nasdaq transaction. Instinet stockholders will receive approximately $1.878 billion in cash, comprised of approximately $934.5 million from Nasdaq, approximately $207.5 million from Silver Lake and the balance from INET's available cash, including approximately $174 million from Bank of New York. The combination of Nasdaq with the INET ECN will provide all investors with a technologically superior trading platform that is positioned to compete effectively in a post-Regulation NMS environment. NASDAQ expects to realize significant savings with the help of the INET technology. It also expects the transaction to reduce clearing costs and corporate expenses associated with the combined entity. NASDAQ anticipates this transaction will be accretive to NASDAQ shareholders within 12 months of closing. Bob Greifeld, President and CEO of NASDAQ, explained, "This transaction will allow Nasdaq to compete more effectively with other U.S. and international market centers by making our technological platform more competitive, which will result in greater cost efficiencies and improved quality of execution in our market -- qualities that today's individual and institutional investors demand. NASDAQ will continue to innovate and will also have the ability to tap new opportunities in other asset classes." |
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