Nasdaq OMX eyes more share buybacks: CEO
By Jonathan Spicer
(Reuters) - Nasdaq OMX Group Inc <NDAQ.O> will reach a targeted 2.5-times leverage ratio earlier than expected and at the end of the third quarter will set a capital plan likely to include share buybacks, its chief executive said.
"Based upon the current depressed share price, the share buyback certainly would look compelling to us, the board, and to probably many of you here," CEO Robert Greifeld said on Tuesday at a conference in New York hosted by Barclays.
The transatlantic exchange operator has repurchased shares since early last year. After backing off a takeover bid for rival NYSE Euronext <NYX.N> this year, it is looking to return capital to shareholders.
Company management and some analysts have said its relatively low share valuation -- about 7.8 times expected 2012 earnings -- does not take into account opportunities for Nasdaq to expand earnings, especially in clearing and data.
NYSE Euronext's comparable P/E ratio is about 9.2, while futures-focused operator CME Group Inc <CME.O> is even richer at 13.3.
"When we get to 2.5 times leverage it's time for us to think about what to do with the excess capital," Greifeld said, adding the company would hit that target by the end of the third quarter.
A capital plan will likely be adopted at a board meeting early in the fourth quarter, he said.
Nasdaq has an estimated $50 million to $75 million in free cash flow per quarter, of which buybacks would be a portion, said Lee Shavel, who became Nasdaq CFO in May.
Greifeld, who built the company on the back of acquisitions, said a merger with Asian exchanges such as Singapore Exchange Ltd <SGXL.SI> was not in the cards at this time. The CEO added, however, he was still interested in taking a stake in European clearinghouse LCH.Clearnet.
London Stock Exchange Group Plc <LSE.L>, as well as Markit and NYSE Euronext jointly, have separate bids in for LCH -- which is seen as more valuable now that lawmakers and regulators globally are forcing more swaps through clearinghouses.
(Reporting by Jonathan Spicer in New York; editing by Maureen Bavdek, John Wallace and Andre Grenon)