London Exchange rejects Nasdaq offer
Updated: 2007-01-26 13:56
LONDON - The London Stock Exchange on Monday spurned a fresh takeover bid from The Nasdaq Stock Market Inc., saying it "substantially undervalued" the London Market.
Nasdaq, taking its second try to take over the LSE, offered to buy the more than 70 percent of the shares it doesn't already own in a deal which values the entire London bourse at $5.1 billion.
"We believe Nasdaq's final offer fails to recognize the outstanding growth record and prospects of our group on a standalone basis let alone the exchange's unique global position," said Clara Furse, chief executive of the London Stock Exchange.
New York-based Nasdaq, which accumulated 25.1 percent of LSE shares during a takeover bid earlier this year, on Monday offered 12.43 pounds ($23.56) per share in cash for the rest. It then announced further purchases which raised its stake to 28.75 percent.
The offer represents a premium of 54 percent on LSE's closing share price March 10, the day before the LSE said it had received an approach, and was the minimum bid it could make under British takeover rules.
"This is a long game that we're playing, and I'm optimistic we'll engage with the London Stock Exchange board in a relatively short period of time," Nasdaq Chief Executive Robert Greifeld told analysts after being informed of the rejection. "As the process moves along, the likelihood we'll engage with the board increases day by day."
LSE shares traded above the offered price, rising 5.9 percent to 12.90 pounds ($24.45) in afternoon trading in London. Nasdaq shares rose 47 cents to $37.04 in trading on the Nasdaq Stock Market.
The combination would be the world's largest equity market by listings, Nasdaq said, with more than 6,400 quoted companies with a total market capitalization of about $11.3 trillion _ a giant ready to slug it out if necessary with a new European exchange which seven major investment banks say they plan to create.
It would also create a trans-Atlantic rival to the company that would be created by New York Stock Exchange's proposed acquisition of the four Euronext exchanges.
The London Stock Exchange, Europe's oldest, now takes about half of the initial public offerings in Europe including a many of the flotations from Russia and Eastern Europe.
Earlier this month, the LSE reported that first-half net profit more than doubled to 54.1 million pounds ($103.2 million), as electronic trading increased 56 percent and income from initial public offerings rose.
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