LSE proposes alliance with TSE after fending off Nasdaq''s unfriendly overtures

12 February 2007

The LSE Group, which operates the London Stock Exchange, and has staved-off several takeover approaches including Nasdaq''s latest bid, is now moving ahead with talks with its counterpart in Japan to build "closer ties" between the two markets.

While a spokesman the exchange said that there are talks between Tokyo and London on how the two exchanges might work together to their mutual advantage, he stressed the talks were not aimed at an eventual merger between the London and Tokyo

The US electronic exchange Nasdaq, which fought a protracted battle to acquire the LSE, had announced on Saturday its failure to persuade LSE''s shareholders to back its £2.7-billion hostile bid for Europe''s biggest exchange.

The LSE''s board had opposed the bid, describing it as "wholly inadequate".

Despite its determined assault on LSE that included building a 29-per cent stake to force LSE''s acceptance of its 1243-pence per share stake, the New York-based Nasdaq only managed to win the backing of 0.4 per cent of the London exchange''s shareholders even after a last-ditch attempt by extending the deadline for shareholders to accept its takeover offer to 1300 GMT on Saturday.

For LSE it was a hat trick of sorts, for it had twice earlier beaten back bids by the ardent suitor. After Nasdaq''s bid deadline elapsed, the LSE issued a statement saying that it "welcomed the rejection by shareholders" of the offer.