The London-based interdealer broker Icap today confirmed that it has pulled out of negotiations with the London Stock Exchange (LSE) after holding merger talks to create a £6 billion UK-based exchange.Michael Spencer, Icap's chief executive, entered talks with the LSE about a month ago but pulled out because he believes that the exchange is overvalued.
In a statement to the LSE today, Icap announced that “exploratory discussions” between the exchanges had taken place. “Those discussions have been discontinued,” Icap said.
The LSE has attracted at least four suitors, sending its share price up 200% over the past two years.
The Nasdaq stock market has built up a 25% stake in the LSE. Under UK takeover rules, Nasdaq can bid for the LSE after October 2, six months after it withdrew a previous offer that was turned down by the LSE. Australia’s Macquarie, the New York Stock Exchange and Euronext have also made bids for the exchange.
According to the Daily Telegraph, Icap is ready to make another bid for the LSE if its shares fall back from its current price, but Icap refused to confirm the story.
Shares in the LSE were trading at £12.47 this morning. A combined exchange would enable the LSE to build a major derivatives platform, which is believed to have been an objective of the exchange since it lost out to Euronext in its attempt to acquire Liffe.
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