NYSE Euronext's attempts to charm investors into backing the lowest of two bids were overshadowed by investor demands the exchange open talks with arch-rival Nasdaq OMX.

At a packed shareholder meeting in New York on Thursday, the Big Board owner faced mounting calls that it talk to its cross-town rival, whose $11.2 billion advances it has rejected in favor of a near $10 billion all stock merger with Deutsche Boerse.

Kenneth Steiner, who owns about 1,000 NYSE Euronext shares, called for the board to be ousted and accused the company of selling itself too cheaply by ignoring the Nasdaq-led cash and stock bid.

This merger is grossly unfair to the shareholders, he said, adding that directors should be removed and replaced by people who could get shareholders better value.

His comments were borne out by a research note from Barclays Capital which said on Thursday: Nasdaq/ICE have made an offer still 9 percent above the current NYSE share price (and 10 percent above the NYSE/Deutsche Boerse value), which ultimately either should be realized through a successful counterbid or through an enhanced value proposition from NYSE/DB.

Chairman Jan-Michiel Hessels told investors on Thursday the board had considered meeting with Nasdaq but had determined this was the wrong thing to do for various reasons.

Deutsche Boerse offers compelling value whereas Nasdaq/ IntercontinentalExchange is fraught with unacceptable execution risk. It is illusory, we don't think it will get the necessary approvals and we believe their request is a tactic to be disruptive (of our merger).

Chief Executive Duncan Niederauer said the Deutsche deal was the difference maker, allowing it to increase employee productivity levels, diversify its business and save $3.0 billion in clearing costs.

Nevertheless, shareholders approved a proposal that gives investors with just 10 percent of the company's shares the power to call special meetings -- a move that could make it easier for Nasdaq and ICE to pursue their counter-bid for the company.

Earlier, Deutsche Boerse and NYSE Euronext both unveiled robust first-quarter results, topping most analyst expectations in a move some market experts said underlined the strength of the two management teams.

These are solid results which will encourage shareholders that the NYSE management, and their plan to join with Deutsche Boerse, are credible, said Herbie Skeete, managing director at exchange consultants Mondo Visione.

FACING OFF THE ENEMY

The shareholder meeting is the first time Niederauer has faced investors since Nasdaq teamed up with Atlanta-based energy market ICE to launch an April 1 bid -- a deal he has staunchly resisted.

NYSE's board took just ten days to snub Nasdaq this month, dismissing its bid as strategically unattractive and warning of heavy U.S. job losses from such a deal.

NYSE and Deutsche Boerse are hoping to convince shareholders to back their deal partly with the promise of savings.

Niederauer raised savings forecasts from the potential deal this week, saying a German merger would generate 400 million euros ($587 million) -- 100 million more than originally stated.

Meanwhile the counterbidders, which are promising $740 million in savings, have issued an open letter to NYSE shareholders to suggest they force NYSE directors into talks.

But both NYSE suitors also face regulatory hurdles.

Deutsche Boerse-NYSE would be the dominant force in European futures trading and the largest European equities group, with a strong presence in U.S. options trading.

Under the alternative plan, Nasdaq would take NYSE Euronext's equities businesses, which would give the merged firm a monopoly over U.S. listings and the vast majority of U.S. share trading. ICE, when combined with NYSE Euronext's European futures arm, would also end up with a strong presence in the U.S. and European futures and options markets.

Emphasizing its cost control abilities, Deutsche Boerse raised its outlook for cost savings as it posted earnings before interest and taxes (EBIT) of 316.3 million euros on sales of 558.6 million. NYSE posted a 19 percent rise in net profit to $155 million on 5 percent higher revenues of $679 million.

($1=.6817 Euro)

(Additional reporting by Paritosh Bansal in New York; Editing by Sophie Walker and Jon Loades-Carter)

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