labels: Corporate finance, M&A, Stock markets - world, Nasdaq
Nasdaq raises $5.8-billion to finance LSE acquisition news
28 November 2006

Nasdaq Stock Market Inc, which operates the US electronic exchange Nasdaq, has disclosed that it has secured $5.1-billion in debt financing and $775 million in equity financing to fund its bid for the remaining shares of the London Stock Exchange Plc, the operator of London-based LSE.

The new borrowings would also help to refinance Nasdaq''s existing debt and other costs with the acquisition of LSE''s remaining shares. Nasdaq already owns 28.75 per cent of LSE. The offer, which the LSE opposes, values the London Exchange at 2.7 billion ($5.1 billion).

American stock exchanges have been keen to have a presence in Europe, where regulations are not as stringent as in the US, enabling companies to list more easily.

For instance, European stock exchange Euronext has scheduled a shareholder meeting on December 19 to seek approval for a proposed takeover by NYSE Group, which has proposed a $10-billion friendly takeover.

According to Nasdaq its $5.1 billion debt facility, led by Bank of America Corp.''s Banc of America Securities, includes a $75-million six-year credit facility, a seven-year $750 million secured term loan, a seven-year $2.5-billion term loan that can be drawn down over time; and a $1.75 billion unsecured bridge loan.

Nasdaq also said that it will sell up to 775,000 shares of perpetual preferred shares, at $1,000 per share, to a Bank of America unit and Dresdner Bank''s Dresdner Kleinwort Securities. Dresdner Bank is a unit of German insurer Allianz (ALVG.DE: Quote, Profile, Research).

Proceeds from Nasdaq''s debt and equity deals would finance the company''s purchase of LSE shares, transaction costs, repayment of existing borrowings and the repurchase of some LSE bonds.

Standard & Poor''s and Moody''s Investors Service both said last week that they could cut Nasdaq''s debt ratings if the company''s borrowings grew too large.


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Nasdaq raises $5.8-billion to finance LSE acquisition