Nasdaq, the US high tech stock exchange, is in advanced talks to take a controlling interest in Easdaq, the struggling market place set up in 1996 to be its European equivalent, newspapers report. A complete takeover is also among the options that are being discussed.
Easdaq trades many of the Nasdaq's high profile US technology companies such as Microsoft, Cisco Systems and eBay. Both markets are dealer driven and screen-based. However Easdaq has not been able to emulate the success of its American model as trading volumes and market liquidity have disappointed.
Likewise Nasdaq's advance into Europe was not what it had hoped either. In 1999, Nasdaq’s plan to launch Nadaq Europe, with several partners outside the securities industry, was largely ignored by bankers who were against adding a new trading platform to a crowded European environment.
A deal would have to secure the support of Knight Securities Inc., the New Jersey-based brokerage firm that has a 19 per cent stake in Easdaq. Nasdaq itself is a founding member of its European sister organisation but owns less than one per cent of its equity.
In financial terms, Nasdaq is well equipped to acquire an existing European platform. A recent private placement by the National Association of Securities Dealers raised $326m for the ambitious stock exchange to spend on its expansion.
Meanwhile Nasdaq will have to tred carefully to avoid any quarrels with other European exchanges, most notably the London Stock Exchange which it is still in talks with. So far Nasdaq has declined to comment on the reported interest in Easdaq.