Nasdaq warns LSE of joining rival exchange

The NASDAQ Stock Market Inc, which operates the largest electronic stock market in the world, has warned that it may team up with investment banks in setting up a rival trading platform if its London Stock Exchange bid fails.

Bob Greifeld, president and CEO, NASDAQ Inc, said NASDAQ had held talks with the group, which plans to launch a pan-European equity-trading platform this year.

Commentators believe this to be a pressure tactic as LSE has spurred attempts by NASDAQ to force a merger between the two.

Having failed in March 2006 with a $4.1-billion bid, last November NASDAQ made a second unsolicited bid to acquire the whole of London Stock Exchange Group (LSE) Plc, which operates the largest European stock exchange. () The all-cash bid revealed announced in London today values LSE at around $5.1 billion, raised later to $5.8 billion.

However, the London exchange has consistently rebuffed the offer, dubbing it "wholly inadequate".

Nasdaq last week said it would extended the closing date for LSE shareholders to accept its 1,243 pence-per-share offer to 10 February, amid signs of a weak response to the bid from investors.