labels: M&A, Stock markets - world, Nasdaq
LSE offers£250-million share buyback to thwart NASDAQ acquisition bid news
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.

"This very low level of acceptances is in line with the board''s view that Nasdaq''s offer substantially undervalues the Exchange and fails to reflect its unique position and the powerful earnings and operational momentum of the business," the LSE said.

NASDAQ has been under pressure to find a European partner amid rival New York Stock Exchange''s trans-Atlantic consolidation with the takeover of Euronext NV.

In mid 2006, seven investment banks, including Goldman Sachs and Citigroup Inc, announced plans to establish a rival European platform of their own.

Shares in LSE have more than trebled over the past two years as it has attracted - and rejected - a procession of suitors, including pan-European market Euronext and Germany''s Deutsche Boerse.

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