Nasdaqs NASD stock repurchase over

New York: The Nasdaq Stock Market (www.nasdaq.com) has announced that it has completed the repurchase of 33.8 million shares of the Nasdaq common stock owned by the National Association of Securities Dealers (NASD) for a consideration valued at $439 million, or $13 per share.

The repurchase is another major step towards Nasdaq's separation from NASD, a major objective of the restructuring efforts undertaken by the two companies over the last two years. Prior to this transaction, NASD owned 77 million shares. The remaining 43.2 million shares owned by NASD represent shares underlying warrants issued during Nasdaq's private equity placement.

“The repurchase of these shares is another major milestone on the road to Nasdaq becoming an independent, investor-owned company,“ says Nasdaq Stock Market chairman and CEO Wick Simmons. “As an independent entity, we will continue to provide a highly liquid, efficient, well-regulated market. We plan to leverage our technology infrastructure, strong brand, and unique client relationships to achieve our vision of creating a global trading platform.“

Nasdaq has repurchased the shares in two separate phases. In Phase I, Nasdaq repurchased 13.5 million shares of the common stock in exchange for cash in a transaction that closed on 21 February 2002. Phase II of the repurchase closed on 8 March 2002, and encompassed the remaining 20.3 million shares of the common stock in exchange for Nasdaq-preferred shares and cash.

Two new series of preferred stock were issued: 1.3 million shares of dividend-paying Series A non-voting stock and a single Series B share representing NASD's continuing majority voting rights. The Series B preferred share will expire when Nasdaq is granted the exchange registration status by the Securities and Exchange Commission and commences operation as a national securities exchange.

“The transaction further aligns Nasdaq with its shareholders,“ says Simmons. “It enables the company to focus on creating value through the development and release of new products and services worldwide.“

Until Nasdaq is granted exchange registration, NASD will continue to control the voting trust, governing all warrants sold in the private placements. The warrants cover approximately 43.2 million shares of the common stock and can be exercised over four years. If any warrants are not exercised, ownership of the shares will revert to NASD.