Second time unlucky for Nasdaq as London Stock Exchange rejects bid

Nasdaq, which had built up a 25% stake in the LSE after an unsuccessful bid for the exchange in March, this morning launched a £2.7 billion bid for the LSE (Risk News, Nasdaq makes second bid for London Stock Exchange).

The LSE issued a statement on its website this afternoon which said the exchange’s board believed the proposal – which represents a 2% premium to the market price at close of business on 17 November 2006 – substantially undervalued the company and failed to recognise its unique strategic position among global exchanges and its powerful earnings potential.

However, Nasdaq remains in the lead of the race to purchase the London-based exchange, which can trace its history back to 1698. Nasdaq increased its stake in the LSE to 28.75% by buying a further 7 million LSE shares at 1,243 pence each.

Clara Furse, chief executive of the LSE, said: “We believe Nasdaq’s final offer fails to recognise the outstanding growth record and prospects of our group on a standalone basis, let alone the Exchange’s unique global position.”

The LSE used its statement rejecting the bid from Nasdaq to highlight the success the business has enjoyed over the past year. The LSE raised £22.3 billion in the year to October through initial public offerings (IPOs), 96% more than the same period in 2005, and more than any other exchange so far this year.

Chris Gibson-Smith, chairman of the LSE, said: “Given the Board’s unanimous view of the final offer from Nasdaq, I have rejected Nasdaq’s request for a meeting.”

Nasdaq said its purchase of the LSE would have created the world’s biggest exchange by number of listings, containing more than 6,400 listed companies with a total of £6.3 trillion ($11.8 trillion). The acquisition of the LSE would also have created the most active global equity market, with an average daily volume of 7.4 billion shares traded.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here