Twice rebuffed, Nasdaq mounts $5.3-billion hostile bid for LSE

12 December 2006

After having been rebuffed twice, the last, barely three weeks back, (See: ) the US electronic exchange Nasdaq has now turned hostile and mounted a £2.7-billion ($5.3 billion) bid for the London Stock Exchange by making an offer straight to shareholders rather than seek a recommendation from the board.

London Stock Exchange, the stock market company, which operates the European London Stock Exchange, had flatly rejected the last £2.7-billion bid on 20 November, 2006, on the ground that it undervalued the firm, after an earlier rejection in May, 2006 for a lower offer of £2.43 billion.

Nasdaq is now sending out its offer document directly to LSE''s shareholders offering £12.43 a share. The US exchange says it has raised over $5 billion to fund a takeover (See: ) part of which would be used to repay all its most significant current debt, and it would also issue new stock worth $775 million.

LSE shareholders have till 11 January, 2007, to accept Nasdaq''s offer. Shares in the London stock market company have more than doubled over the past year amid ongoing speculation it would be subject to a takeover offer.

At the time of withdrawing in May, 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 creates the first pan-Atlantic stock market group and provide international companies with options to list in the US, Europe or both locations.