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Nasdaq makes £2.7bn offer for LSE Nasdaq makes £2.7bn offer for LSE
(about 1 hour later)
A takeover offer worth £2.7bn ($5.1bn) has been tabled for the London Stock Exchange (LSE) by the US Nasdaq market.A takeover offer worth £2.7bn ($5.1bn) has been tabled for the London Stock Exchange (LSE) by the US Nasdaq market.
Under the deal Nasdaq, which already owns more than 25% of the LSE's stock, said it would pay 1243 pence per share. Nasdaq also said it had paid £87.8m to buy 7 million LSE shares, raising its stake in the group to 28.75%.
Shares in the London market have surged more that 124% over the past year amid ongoing speculation that it will be subject to a takeover offer.Shares in the London market have surged more that 124% over the past year amid ongoing speculation that it will be subject to a takeover offer.
A number of foreign suitors, including the New York Stock Exchange, have approached it in recent months. Nasdaq said it planned a dual listing in London and New York if its offer of £12.43 a share is successful.
In a statement, Nasdaq said it planned a dual listing in London and New York if its offer is successful.
'Final offer''Final offer'
"We are excited about the prospect of combining two strong businesses to form the leading global, cross-border equity market platform giving issuers the ability to dual-list simultaneously in London and New York," said Nasdaq president and chief executive Robert Greifeld."We are excited about the prospect of combining two strong businesses to form the leading global, cross-border equity market platform giving issuers the ability to dual-list simultaneously in London and New York," said Nasdaq president and chief executive Robert Greifeld.
"The combined entity will be well positioned to lead further consolidation and compete effectively for the benefit of all market users.""The combined entity will be well positioned to lead further consolidation and compete effectively for the benefit of all market users."
LSE BID TIMELINE December 2004 - Deutsche Boerse tables £1.35bn offerDecember 2004 - Euronext makes merger approachMarch 2005 - Deutsche Boerse drops takeover plansDecember 2005 - Macquarie tables £1.5bn bidFebruary 2006 - Macquarie ditches offerMarch 2006 - Nasdaq tables £2.4bn bidMarch 2006 - Nasdaq withdraws bid, Deutsche Boerse drops plans for LSE offerApril 2006 - LSE denies reports of an approach from New York Stock ExchangeMay 2006 - Nasdaq raises LSE stake to 25.1%September 2006 - Brokerage Icap calls off merger talksNovember 2006 - Nasdaq tables "final offer" of £2.7bn, ups stake to 28.75% Check LSE shares
Nasdaq said it would not be revising its "final offer" unless another company decided to make a bid for the London market.Nasdaq said it would not be revising its "final offer" unless another company decided to make a bid for the London market.
However, BBC Business Editor Robert Peston said the LSE would probably reject the offer.
"The LSE is bound to reject this offer, it will say the business is growing fast and that Nasdaq is being opportunistic," Mr Peston said.
He added the London exchange could have a hard time seeing off the approach as the Nasdaq now holds a significant stake in the company while there was "almost no basis for the UK authorities to block this deal".
He added that the Nasdaq had also swooped now to take advantage of a recent fall in the LSE's share price which came in the wake of news that seven investment banks were creating a rival to the LSE.
The bid is Nasdaq's second attempt at taking over the firm.The bid is Nasdaq's second attempt at taking over the firm.
In March, it dropped a proposed £2.43bn ($4.2bn) bid for the exchange after the LSE rejected its advance.In March, it dropped a proposed £2.43bn ($4.2bn) bid for the exchange after the LSE rejected its advance.
The US firm is the latest in a long line of foreign suitors to approach the London market.The US firm is the latest in a long line of foreign suitors to approach the London market.
German market Deutsche Boerse, Australian investment bank Macquarie and the pan-European exchange Euronext have all abandoned offers for LSE since December 2004.German market Deutsche Boerse, Australian investment bank Macquarie and the pan-European exchange Euronext have all abandoned offers for LSE since December 2004.
Regulatory worriesRegulatory worries
The approaches have prompted the UK watchdog to voice concern about a foreign takeover as it could lead to regulatory changes.The approaches have prompted the UK watchdog to voice concern about a foreign takeover as it could lead to regulatory changes.
Nasdaq attempted to ease these concerns with its offer saying that the UK exchange would continue to be regulated solely by the UK's Financial Services Authority.Nasdaq attempted to ease these concerns with its offer saying that the UK exchange would continue to be regulated solely by the UK's Financial Services Authority.
Meanwhile, the LSE has resisted approaches saying that it can continue to grow alone.Meanwhile, the LSE has resisted approaches saying that it can continue to grow alone.
Earlier this year, LSE chief executive Clara Furse said the company would not do a deal for the sake of doing a deal.Earlier this year, LSE chief executive Clara Furse said the company would not do a deal for the sake of doing a deal.
But analysts and market observers have speculated that the Nasdaq is in a strong position and stock exchanges will need to merge if they want to keep on growing and offer a wide-range of global financial services.But analysts and market observers have speculated that the Nasdaq is in a strong position and stock exchanges will need to merge if they want to keep on growing and offer a wide-range of global financial services.
Last month, City leaders warned that the LSE risked losing its dominant market position in the face of growing global competition.Last month, City leaders warned that the LSE risked losing its dominant market position in the face of growing global competition.