According to sources familiar with the matter, S&P Global Inc. (NYSE:SPGI) is attempting to buy fellow stock index provider MSCI Inc. (NYSE:MSCI) for $11 billion, but its initial offer price has been declined.

Written by StockNews.com

The Evening Standard has some details on the big M&A attempt:

City sources said MSCI, a Morgan Stanley spin-out which compiles some of the biggest market indices used by fund managers, has spurned a $120-per-share approach from the Wall Street giant behind the Dow Jones and S&P 500 indices.

Apparently, MSCI is willing to deal, but only at a higher price:

MSCI and its major shareholders are understood to be holding out for a $130-a-share offer worth almost $12 billion in anticipation of a bidding battle, the sources added.

Sources indicated that S&P is primarily interested in MSCI’s indices segment, and would likely spin off the company’s data analytics business. A combination of the two firms would create the world’s largest index provider by a wide margin, and give it ultimate pricing power over thousands of mutual funds and ETFs that pay licensing fees to track those indexes.

S&P Global Inc. shares were trading at $130.95 per share on Wednesday morning, down $1.22 (-0.92%). Year-to-date, SPGI has gained 22.15%, versus a 6.20% rise in the benchmark S&P 500 index during the same period. SPGI currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 66 stocks in the Financial Services (Enterprise) category.

Meanwhile, MSCI Inc. shares were trading at $106.64 per share on Wednesday morning, up $10.31 (+10.70%). Year-to-date, MSCI has now gained 35.77%. MSCI currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #10 of 66 stocks in the Financial Services (Enterprise) category.

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