Nasdaq Close to Buying Philadelphia Stock Exchange, People Say

Nasdaq Stock Market Inc., the all- electronic exchange that handles the most shares in the U.S., is close to buying the Philadelphia Stock Exchange for about $650 million, entering the fast-growing options business.

The transaction may be announced as soon as today, said two people familiar with the deal who declined to be identified because the negotiations aren't public.

Chief Executive Officer Robert Greifeld has struck four other acquisitions this year, spurring a 58 percent rise in Nasdaq shares to an all-time high yesterday. Gaining control of the Philadelphia market would make Nasdaq the third-biggest exchange in the $1 trillion U.S. options industry, where trading is growing at its quickest pace in seven years.

``They have arguably been the most acquisitive company in the exchange space,'' said Ed Ditmire, an analyst at Fox-Pitt, Kelton Cochran Caronia Waller, who has an ``in line'' rating on Nasdaq. ``The company is definitely hustling to grow. Expanding into fast-growing and more profitable options trading is going to be viewed positively by investors.''

Spokeswomen Barbara Sorid of the Philadelphia exchange and Silvia Davi of Nasdaq declined to comment.

Nasdaq yesterday rose $1.06, or 2.2 percent, to $48.81 in New York trading, the highest since the shares debuted in 2002. The FTSE/Mondo Visione Exchanges Index, which tracks 20 publicly traded exchanges from around the world, has risen 68 percent this year.
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