NASDAQ, the technology-laden US stock exchange, last night snapped up a 15 per cent stake in the London Stock Exchange in a move that could effectively block any bid from Euronext and the New York Stock Exchange.
The stake signals that it is prepared to pay at least £12 a share if it decides to bid for the LSE after the Takeover Panel’s six-month deadline lapses on September 30.
The acquisition of the stake, which makes Nasdaq the biggest shareholder in the Exchange, comes after rumours at the weekend that the LSE was in talks about a possible nil-premium merger with Euronext, the European exchange. Euronext would not comment yesterday on the rumours, nor on the stakebuilding by Nasdaq.
The New York Stock Exchange has also hinted that it would be interested in a deal with the LSE.
Nasdaq paid £11.75 a share to buy the entire 13 per cent shareholding of Threadneedle Asset Management, the LSE’s biggest shareholder and main opponent of a merger. It also mopped up a further 2 per cent from a number of different shareholders.
The total paid — £447 million — represented a 17 per cent premium to the LSE’s closing share price.
Michael Taylor, head of equities at Threadneedle, said: “We continue to believe that the LSE is the world’s most successful cash equity trading platform operating in the world’s most successful financial centre and are pleased to see this value recognised by the market.”
Last month Nasdaq withdrew a hostile 950p-a-share bid for the Exchange, which valued the LSE at £2.4 billion. It was the third would-be bidder to walk away. Previous potential bidders included Deutsche Börse and Macquarie, the Australian investment bank.
Nasdaq would not comment last night beyond saying that the acquisition of the stake was “strategic”. It dropped its proposed offer for the LSE last month after meetings with shareholders including Threadneedle.
The six-month bidding ban for Nasdaq drops away if the LSE chooses to announce a deal with a third party or decides to make a disposal.
Henk Potts, an analyst at Barclays Stockbrokers, said: “There has been an awful lot of talk and an awful lot of speculation, but this is the first time that one of the suitors has been prepared to put hard cash down and put its money where its mouth is.” He added: “The purchase of 15 per cent of LSE gives them a platform from which they believe they can determine the future of the LSE.”
The acquisition of the stake comes as the LSE goes ahead with a £510 million return of cash to shareholders
By Caroline Merrell
© The Times
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