Nasdaq talked with Carlyle about going private: sources

Mon Feb 11, 2013 4:22pm EST
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By John McCrank and Greg Roumeliotis

NEW YORK (Reuters) - Private equity firm Carlyle Group recently approached Nasdaq OMX Group about taking the exchange operator private, but the talks fell apart over a disagreement on price, sources familiar with the deal said on Monday.

Carlyle initiated the discussions and was in early stages of due diligence when differences emerged, bringing the talks to an end, a source familiar with the matter told Reuters.

Shares of Nasdaq rose 3.1 percent at $30.38 on Monday in regular trading.

Management at Nasdaq has long felt the company is undervalued compared with its peers, two separate sources said. Nasdaq's board has a fiduciary responsibility to consider all offers.

All of the sources asked not to be identified because they are not authorized to speak publicly on the matter.

The talks, first reported by Fox Business Network, occurred about three weeks ago.

Nasdaq spokesman Joseph Christinat said the company does not comment on market rumors or speculation. A spokesman for Carlyle declined to comment.

Taking Nasdaq private makes sense from one perspective, because the company generates strong free cash flow, which would help a private equity firm structure a deal, said Rich Repetto, an analyst at Sandler O'Neill.   Continued...

Commuters walk past the NASDAQ MarketSite in New York's Times Square May 22, 2012. REUTERS/Keith Bedford