Update: LSE again rebuffs Nasdaq bid

20 November 2006

The London Stock Exchange (LSE) has once again rejected NASDAQ''s $5.1-billion takeover bid, on the same ground — that it " undervalued" the company. (See: ) LSE has also rejected NASDAQ''s request for a meeting after it made the bid, its second since its $4.1-billion offer this March year and a 25.1-per cent improved bid in May.

The new bid is a 28.75 improvement over its previous offer but has again not found favour with the LSE. LSE said the offer failed to reflect LSE''s strong financial and strategic position.

The earlier rebuff forced NASDAQ to back off from a full acquisition, but not before it had built up a 25-per cent stake becoming LSE''s single largest shareholder.

Though NASDAQ had maintained that it did not intend to make a full acquisition in the near future, the acquisition of European electronic exchange Euronext by its American rival NYSE Group again has forced NASDAQ''s hand to come out with a fresh bid to establish a European foothold.

The NYSE-Euronext deal would create the first pan-Atlantic stock market group and provide international companies with options to list in the US, Europe or both locations.

Moreovger the drop in LSE''s share prices last week on the news that several global banking giants were planning to launch a rival European exchange, must have further emboldened the world''s largest electronic exchange to revive its bid. It had even announced that it planned a dual listing in London and New York if its recent bid succeeded.