NYSE Euronext directors rejected as too risky and lacking value a sweetened takeover offer from Nasdaq OMX Group and IntercontinentalExchange , the second time in 11 days the board backed a lower bid from Germany's Deutsche Boerse AG .

This week's revised bid is substantially the same as what was previously rejected, NYSE Euronext Chairman Jan-Michiel Hessels said in a statement.

In similar language to the board's first rejection on April 10, Hessels said the new offer does not provide compelling value, has unacceptable execution risk and is therefore not in the best interests of NYSE Euronext shareholders.

Though the decision was expected, it could further pave the way for a bidding war, and it reinforces the need for Nasdaq and ICE to convince NYSE shareholders that their proposal can survive a tough U.S. antitrust review.

Hours after the board's decision, Nasdaq and ICE issued a statement repeating that their bid was superior and that they would continue direct discussions with shareholders.

Nasdaq OMX and ICE have directly met each of the specific concerns initially raised by NYSE Euronext's board and their response is now vague generalities unsupported by the actual facts, the exchanges said.

The NYSE board reaffirmed its support for a friendly $9.8 billion takeover offer from Deutsche Boerse. Though it is 14 percent lower than the unsolicited $11.2 billion offer from Nasdaq and ICE, NYSE Euronext argues it fits with the company's strategy to grow internationally with more diverse revenues.

Nasdaq and ICE bid for the New York Stock Exchange parent company on April 1. On Tuesday, they promised to pay NYSE Euronext $350 million if regulators blocked a merger -- a pledge meant to ease the board's antitrust worries and draw them to the negotiating table.

The pair -- which were left out of a wave of global merger plans among exchanges earlier this year -- said they secured committed financing for the deal from banks, and said antitrust regulators would start a review soon.

STANDING FIRM

The battle for the Big Board has grown increasingly bitter, and its outcome could revamp ownership of many of the largest market operators in Europe and the United States.

Both offers face tough regulatory reviews on both sides of the Atlantic, complicating things for investors betting on which bid, if any, will prevail.

While NYSE Chief Executive Duncan Niederauer said on Monday competitors were trying to disrupt, distract and discredit his company, Nasdaq CEO Robert Greifeld said on Wednesday he will consider all options available as he and ICE pursue NYSE to the endgame.

They're both pursuing their strategies, and right now you're seeing the NYSE board stand firm, said Richard Repetto, analyst at Sandler O'Neill. But if you take Greifeld at his word, and there's no reason not to, he's in it for the long run.

Greifeld -- like Niederauer known as an aggressive deal-maker -- said in a statement on Thursday that he and ICE would not be deterred by the board's attempts to protect an inferior transaction.

In a separate statement, Deutsche Boerse said it is moving ahead with integration planning. It called Nasdaq and ICE's proposal lacking in business logic and a major step backward in the evolution of the global exchange industry.

NYSE shareholders are set to meet on April 28 for their annual vote on the company's directors. The way the vote goes will be a modest referendum on how the shareholders feel about the board's decisions, Repetto said.

The shareholders will likely vote on the Deutsche Boerse tie-up in July.

(Reporting by Jonathan Spicer. Additional reporting by Clare Baldwin and Paritosh Bansal. Editing by Robert MacMillan, Gary Hill)

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