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| LSE rejects £2.7bn Nasdaq offer | LSE rejects £2.7bn Nasdaq offer |
| (about 4 hours later) | |
| The London Stock Exchange (LSE) has rejected US firm Nasdaq's £2.7bn takeover bid, saying it "substantially undervalues" the company. | The London Stock Exchange (LSE) has rejected US firm Nasdaq's £2.7bn takeover bid, saying it "substantially undervalues" the company. |
| LSE also turned down Nasdaq's request for a meeting after the market operator made a second bid for the firm and upped its stake in LSE to 28.75%. | LSE also turned down Nasdaq's request for a meeting after the market operator made a second bid for the firm and upped its stake in LSE to 28.75%. |
| Nasdaq was "disappointed" by the LSE's decision but said the offer was "full, final and fair" to shareholders. | Nasdaq was "disappointed" by the LSE's decision but said the offer was "full, final and fair" to shareholders. |
| The government said it was neutral as to the nationality of LSE's owner. | The government said it was neutral as to the nationality of LSE's owner. |
| 'Outstanding growth' | 'Outstanding growth' |
| Shares in the London stock market company have surged more than 124% over the past year amid ongoing speculation it will be subject to a takeover offer. | Shares in the London stock market company have surged more than 124% over the past year amid ongoing speculation it will be subject to a takeover offer. |
| Its shares rose a further 6% on Monday on news of Nasdaq's bid and maintained the gain by closing. | Its shares rose a further 6% on Monday on news of Nasdaq's bid and maintained the gain by closing. |
| At the moment LSE shares are trading well above the offer price at £12.91 per share - well above Nasdaq's bid of £12.43 - suggesting that investors still want a higher premium before the takeover will be accepted. | At the moment LSE shares are trading well above the offer price at £12.91 per share - well above Nasdaq's bid of £12.43 - suggesting that investors still want a higher premium before the takeover will be accepted. |
| Nasdaq said it planned a dual listing in London and New York if its bid, the second it has made for LSE, was successful. | Nasdaq said it planned a dual listing in London and New York if its bid, the second it has made for LSE, was successful. |
| 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% Q&A: LSE takeover | 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% Q&A: LSE takeover |
| But LSE said the offer failed to reflect LSE's strong financial and strategic position. | But LSE said the offer failed to reflect LSE's strong financial and strategic position. |
| "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," chief executive Ms Furse 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," chief executive Ms Furse said. |
| 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. |
| "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. |
| "This is a long game that we're playing, and I'm optimistic we'll engage with the London Stock Exchange board in a relatively short period of time," he added. | "This is a long game that we're playing, and I'm optimistic we'll engage with the London Stock Exchange board in a relatively short period of time," he added. |
| 'Price-driven move' | 'Price-driven move' |
| BBC Business Editor Robert Peston said it was almost inevitable that the LSE would reject the offer. | BBC Business Editor Robert Peston said it was almost inevitable that the LSE would 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. | "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 held a significant stake in the firm while there was "almost no basis for the UK authorities to block this deal". | He added the London exchange could have a hard time seeing off the approach as the Nasdaq now held a significant stake in the firm while there was "almost no basis for the UK authorities to block this deal". |
| The UK has for some years been open to overseas investment in UK exchanges Ed Balls, Economic Secretary to the Treasury | The UK has for some years been open to overseas investment in UK exchanges Ed Balls, Economic Secretary to the Treasury |
| He added that the Nasdaq had 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. | He added that the Nasdaq had 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. |
| In March, Nasdaq dropped a proposed £2.43bn ($4.2bn) bid for the exchange after the LSE rejected its advance. | In March, Nasdaq 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 worries | Regulatory 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 saying the UK exchange would continue to be regulated solely by the UK's Financial Services Authority. | Nasdaq attempted to ease these concerns saying the UK exchange would continue to be regulated solely by the UK's Financial Services Authority. |
| The government said it was concerned not with the nationality of LSE's owner but that its current regulatory regime was safeguarded. | The government said it was concerned not with the nationality of LSE's owner but that its current regulatory regime was safeguarded. |
| "The UK has for some years been open to overseas investment in UK exchanges," said Ed Balls, Economic Secretary to the Treasury. | "The UK has for some years been open to overseas investment in UK exchanges," said Ed Balls, Economic Secretary to the Treasury. |
| The LSE has resisted approaches saying it can continue to grow alone. | The LSE has resisted approaches saying it can continue to grow alone. |
| 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. |