LSE offers£250-million share buyback to thwart NASDAQ acquisition bid

19 January 2007

The London Stock Exchange PLC has offered to return £250 million to its shareholders in its bid to repel a takeover attempt by the US-based NASDAQ Stock Market Inc.

A week ahead of the 26 January final offer deadline from NASDAQ, LSE yesterday issued a circular to shareholders raising its forecast of trade volume to 480,000 per day in 2008 - an increase of 41 per cent from its previous estimate and 180 per cent higher than in 2005 and increased its share buyback plan by £250 million.

Clara Furse, chief executive, LSE, said the revised forecast on the number of trades it would carry out made the company an "increasingly attractive strategic asset".

The share buyback offer is on top of £50-million pounds offered earlier this year, and raises the total offer over the last two-and-a-half years to £974 million pounds. It said that it still had £18 million pounds to spend from the previous £50-million buyback offer.

NASDAQ has built a 28.75-per cent stake in the London Exchange. Its offer of 1,243 pence per share values the LSE at £2.7 billion, a price that Chris Gibson-Smith, chairman of the LSE described as a "wholly inadequate offer that persists in undervaluing the world`s capital market."

Last week, the NASDAQ said it had secured agreements to buy just 0.6 per cent shares available in its takeover target. The LSE said that the low uptake level indicated that the hostile £2.7-billion offer was too low and recommended to shareholders rejecting the offer.