25 April 2006

Telegraph: LSE told to deny Big Board offer

The London Stock Exchange has been told by the Takeover Panel to issue a statement saying it has not received an approach from the New York Stock Exchange, prompting its shares to slip 18p to £12.38. The Panel is understood to have asked the LSE to clarify the status of its relationship with the NYSE after various media reports last week said the US exchange had approached the London bourse with a takeover offer. The LSE said yesterday: 'In response to recent press speculation the London Stock Exchange would like to confirm that it has not received an approach from the New York Stock Exchange about a possible offer.'

While there has been no actual approach from New York's so-called Big Board, it is understood it has held discussions with the London bourse. Both exchanges have in recent weeks issued statements saying they were in talks with rivals over possible deals. While neither the NYSE nor the LSE named the parties, it has been widely thought that the talks were mainly with each other.

The LSE said in a statement on April 12 after rejecting an offer from the NYSE's smaller rival, Nasdaq: 'The board is exploring the options available to it to create additional value for shareholders and customers, including discussions with other major exchanges.' Meanwhile, the NYSE said in a regulatory filing on April 14 it was talking to 'certain participants'' about 'strategic transactions''.

The LSE has been the subject of several takeover offers, most recently from Nasdaq. The electronic exchange offered 950p a share for the LSE on April 11, but then walked away after the LSE said the offer undervalued its business.

However, Nasdaq surprised the market by snapping up 14.99pc of the exchange mainly by buying Threadneedle Investment's stake for £11.75 a share. Nasdaq may want to buy more LSE shares, but it could struggle to pay the price the shares are now trading at.

By Katherine Griffiths

© The Telegraph