NEW YORK/LONDON (Reuters) – Nasdaq OMX and IntercontinentalExchange are poised to go hostile in their bid for NYSE Euronext after shareholders ratcheted up pressure on the Big Board parent to get a better deal.
Nasdaq OMX Group Inc and IntercontinentalExchange Inc are expected to soon take their $11.1 billion bid directly to NYSE's shareholders through a tender offer, two sources familiar with the situation said.
The move is seen as the next logical step for Nasdaq and ICE after being rebuffed twice by NYSE, which has refused to open talks on their offer. NYSE favors its existing $10.1 billion deal with Germany's Deutsche Boerse AG.
A direct appeal to shareholders through a tender offer would ramp up the pressure that NYSE is already under, although they also have defenses to keep Nasdaq and ICE at bay.
NYSE, for instance, can institute a poison pill, which would thwart the hostile bid by making it more difficult and expensive for the rivals to buy its shares.
In signs the Big Board is facing growing dissent over its strategy of just saying "no," shareholders at its annual meeting on Thursday approved two proposals that the board had advised against, and directors who were up for election got fewer votes than before.
Investors at the packed meeting in New York urged NYSE management and board to start talks with Nasdaq and ICE, while also asking them to press Deutsche Boerse to sweeten its deal.
"This merger is grossly unfair to the shareholders," said Kenneth Steiner, who owns about 1,000 NYSE Euronext shares. "I voted against the directors. I believe they should be removed and replaced with those who can get us the appropriate value for our shares."
The NYSE board and managers who launched a charm offensive to woo shareholders stuck to their belief that the Deutsche Boerse deal was the better way to go.
Earlier on Thursday, NYSE CEO Duncan Niederauer said he would close the "perceived value gap" between the deals. The Nasdaq/ICE offer is about 10 percent higher than the Deutsche Boerse deal.
Niederauer, a fierce rival of Nasdaq's Robert Greifeld, promised that a combined NYSE-Deutsche Boerse would have much higher earnings, diverse revenues and would cut costs.
With shareholders pushing for a sweeter deal from the German exchange, Niederauer said, "We would hate to miss out on an accelerating opportunity because we just got a touch too greedy on the ratio."
NYSE Chairman Jan-Michiel Hessels called the unsolicited offer from Nasdaq and ICE "illusory" and "fraught with unacceptable execution risk.
"We believe their request for a meeting is a tactic principally designed to be disruptive to our combination and therefore we see no basis for which to meet with them," Hessels said.
NYSE's board took just 10 days to snub Nasdaq this month, dismissing its bid as "strategically unattractive" and warning of heavy U.S. job losses from such a deal.
Eight of nine institutional investors polled by Reuters this week said NYSE Euronext should at least sit down with Nasdaq and ICE.
On Thursday, shareholders approved a proposal that gives investors with just 10 percent of the company's shares the power to call special meetings -- a move that could make it easier for Nasdaq and ICE to pursue their counter-bid if it drags on after a July shareholder vote.
NYSE said it would likely take 12 months to adopt the proposal.
The shareholders reelected the directors with an average of 80 percent support, according to preliminary results. Last year, the directors got more than 90 percent support.
Separately, Deutsche Boerse said it has no plans to sweeten its offer, but highlighted possible cost savings of at least 500 million euros ($742 million) from the deal.
The target is 100 million euros higher than the initial estimates. Half of the additional savings would come from the technology unit.
Deutsche Boerse and NYSE Euronext also reported strong first-quarter results, topping analyst expectations.
NYSE earned 68 cents a share, excluding items, topping the 60 cents Wall Street expected.
Separately, CME Group Inc said its first-quarter profit rose 22 percent, beating expectations, as the biggest U.S. futures exchange operator handled record trading in energy and grains.
(Additional reporting by Ann Saphir in Chicago and Edward Taylor in Frankfurt; editing by Sophie Walker, Jon Loades-Carter, Robert MacMillan and Andre Grenon)
SHANGHAI – State-owned China Construction Bank Ltd., the country's third-biggest commercial lender, says its first quarter profit rose 34 percent from a year earlier, buoyed by higher income from fees and interest.
The Beijing-based bank reported late Thursday that profit for January-March was 47.2 billion yuan ($7.3 billion), or 0.19 yuan (3 U.S. cents) a share. Profit for the same period a year earlier was 35.2 billion yuan.
Like other Chinese lenders, the bank has benefitted from rising interest rates and from a surge in lending to support construction and other stimulus projects.
Net interest income rose 25.3 percent over a year earlier in the first three months of the year to 71.6 billion yuan ($11 billion) while non-interest income such as fees and commissions surged 37.3 percent to 23.2 billion ($3.6 billion), the bank said.
Construction Bank said it was taking steps to reduce exposure to risky sectors by tightly controlling new loans to real estate projects.
LOS ANGELES – The CEO of the parent company of TJMaxx, Marshalls and HomeGoods discount stores received compensation valued at about $19.3 million in fiscal 2011, a 30 percent increase from the previous fiscal year, according to an Associated Press review of the retailer's proxy statement.
The increase in TJX Cos. Inc. CEO Carol Meyrowitz's compensation comes as the Framingham, Mass.-based company posted rising profits and revenue for the fiscal year ended in January.
In addition, TJX's board of directors cited the company's 8 percent increase in net sales for the year, its 4 percent jump in comparable store sales and an increase in customer traffic.
Meyrowitz was awarded a base salary of about $1.6 million, up about 7 percent from the previous fiscal year, according to documents filed with the Securities and Exchange Commission on Thursday.
The majority of Meyrowitz's pay package came from a 63 percent hike in stock awards valued at $12.6 million at the time they were granted. She also received $947,524 in option awards, down 19 percent from the year before.
The executive's performance-based cash bonus also declined, dropping 6 percent to $4.1 million. Of that, some $2.4 million was earned under the company's short-term cash incentive program and $1.7 million was earned under a long-term cash incentive program covering the past three fiscal years.
Meyrowitz also received perks valued at $43,495, down 15 percent from what she received in fiscal 2010.
The perks package was comprised of $35,904 for an automobile benefit; $2,175 in reimbursements for financial, tax planning and legal services; $4,204 in contributions or credits under savings plans; and, $1,212 for life insurance.
Meyrowitz did not receive a bonus for fiscal 2011, or in the prior two years.
Her total compensation in fiscal 2010 was about $14.8 million.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
Meyrowitz, 57, has been CEO of TJX since 2007.
For fiscal 2011, the company earned $1.34 billion, or $3.30 a share. That's an increase of almost 11 percent. Its revenue rose 8.2 percent to $21.94 billion.
Still, the retailer saw its overall sales growth slow as it closed fiscal 2011.
Revenue at stores open at least a year rose 4 percent, compared with a 6 percent gain in fiscal 2010, which ended in January 2010. Sales at stores open at least a year is considered a key figure for retailers because it measures growth at existing locations rather than including new ones.
TJX has slowed its expansion in Europe. It also has taken steps to close its A.J. Wright discount stores and convert some of them into T.J. Maxx, Marshalls or HomeGoods stores.
TJX's shares finished the 2011 fiscal year up about 26 percent to $47.71, from $38.01 at the close of fiscal 2010