Hellman & Friedman sells NASDAQ shares, Silver Lake may follow(3)

Hellman & Friedman has exited its 15 percent stakes in NASDAQ Stock Market, earning a 3.3 times return on its initial investment. Silver Lake has registered to exit its stake as well.

Hellman & Friedman has sold its stake in NASDAQ Stock Market, earning $1 billion (€688 million) from the sale of 23.5 million shares. The firm has fully exited its 15 percent stake in the bourse, earning a 3.3 times return on its total investment, according to the firm.

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Silver Lake has also registered to sell its shares in NASDAQ. At yesterday’s closing price of $40.62 the firm could earn around $455 million if it sold all of its 11.2 million shares, generating a 3.6 times return on its initial investment.

Hellman & Friedman originally invested $240 million for a 10 percent stake in 2001, ahead of the exchange’s 2002 initial public offering, and made an additional investment of $60 million in 2005. The US private equity was NASDAQ’s largest shareholder.

Silver Lake invested $145 million in 2005 to fund NASDAQ’s acquisition of electronic brokerage Instinet, giving the firm a seven percent stake in the exchange.

The electronic exchange has made several other acquisitions in recent months, including the $652 million buyout of the Philadelphia Stock Exchange last week and the $61 million acquisition of the Boston Stock Exchange last month.

Though stock exchanges have frequently bought stakes in one another in recent years, private equity investment in stock exchanges is less common. In one of the few such transactions, General Atlantic bought a 5 percent stake in India’s National Stock Exchange this January.

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