4th UPDATE: NYSE Board Told To Talk To Nasdaq, ICE

Some shareholders loudly told NYSE Euronext's board of directors to open talks with unsolicited bidders Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE), warning that an agreed deal with Deutsche Boerse AG (DBOEF, DB1.XE) undervalues their company.

Other longtime investors in the New York Stock Exchange parent, which held its annual meeting on Thursday, expressed support for the Deutsche Boerse combination, which NYSE Euronext management has for the past month heavily promoted.

"Based on everything I've heard and read, I believe this merger is grossly unfair to the shareholders," Kenneth Steiner, owner of 1,000 NYSE Euronext shares, told NYSE Euronext's board Thursday at the meeting.

The closely watched gathering came more than two months since NYSE Euronext announced its intention to merge with Frankfurt's Deutsche Boerse to create a $25 billion exchange behemoth, and about one month since ICE and Nasdaq launched a rival proposal to break up NYSE and make its pieces more profitable.

All NYSE Euronext directors nominated won shareholders' approval Thursday, securing about 80% of the vote by early estimates; dissenting votes had been anticipated as a sign of shareholder dissatisfaction with the board's decision not to open talks with ICE and Nasdaq.

A provision for investors with more than 10% of outstanding shares to call a special meeting was passed at the Big Board's annual meeting Thursday, providing another opening for Nasdaq and ICE should they woo NYSE investors to their cause.

Famed shareholder activist Evelyn Davis interjected herself into proceedings multiple times, at one point asking "why didn't you speak to Mr. Greifeld?" She was referring to Nasdaq OMX Chief Executive Robert Greifeld.

"I don't know that I'd have anything to do with him, but I would have talked to him," said Davis.

NYSE Euronext Chairman Jan-Michiel Hessels at the meeting again rejected the idea of talking to the new suitors, calling their unsolicited bid for his company a "tactic" designed to break up the agreed Deutsche Boerse deal, seen creating a formidable global competitor.

"The board unanimously determined this was the wrong thing to do," Hessels told shareholders. "We see no reason to meet with them."

Some longtime investors in NYSE Euronext voiced support for the tie-up with Deutsche Boerse. "We've gotten more than enough adequate information" to earn support for the proposal, said Peter Haas, a retired NYSE specialist who said he plans to vote his shares in favor of the combination.

NYSE Euronext investors are slated to vote on the Deutsche Boerse deal on July 7.

The remarks came as NYSE Euronext touted a rise in first-quarter net profit Thursday and said its integration planning for its agreed tie-up with Deutsche Boerse AG is on track.

The company also declared a cash dividend of $0.30 a share for the second quarter, matching the dividend announced for the first quarter.

"It's a terrific start to the year by any measure," Chief Executive Duncan Niederauer said at the meeting.

Niederauer, who has been pitching the tie-up with Deutsche Boerse to shareholders in the past month following an unsolicited approach for NYSE Euronext by Nasdaq OMX and IntercontinentalExchange, said the deal would be the "accelerator" of the Big Board parent's growth.

Net profit attributable to shareholders came to $155 million, up about 19% from $130 million a year earlier.

Excluding costs, NYSE Euronext's first-quarter net profit was $177 million, up 26% from $140 million a year earlier, and earnings per share rose to $0.68 from $0.54 previously. Net revenue rose 5% to $679 million due to a better performance from its three key business segments--cash trading and listings, derivatives and information services.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

-Vladimir Guevarra and Kristina Peterson contributed to this article.

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