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April 14, 2005

Nasdaq suggested to hold interest in Instinet

US stock market Nasdaq is reported to be in talks with information company Reuters to buy its electronic marketplace and brokerage unit Instinet.

By CBR Staff Writer

The acquisition would be Nasdaq’s second in less than a year, after it purchased Brut, owner of the Brut ECN electronic liquidity provider, last September.

It will also be Reuters’ third sale this year, in what has been seen by industry observers as further evidence that the company is trying to offload its non-core businesses in order to focus on its broker-neutral services. Execution broker Bridge Trading was sold to Instinet last month, closely followed by BT’s purchase of financial services provider Radianz.

Reuters announced plans to put Instinet on the market last November. At the time it was thought that the unit would be sold in two parts, since the company operates two separate businesses: an electronic trading network and an institutional brokerage business. Back then, the fight had been between Nasdaq, the Chicago stock exchanges and Archipelago Holdings, operator of the ArcaEx electronic stock market, with the latter highly anticipated to triumph.

In the latest developments, however, it seems that Nasdaq plans to buy the entire business for a reported $2.5bn, according to reports from the Financial Times.

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