Wednesday, April 12, 2006
FT.com / Lex - Lex: LSE / Nasdaq
Let the end game begin. The London Stock Exchange has spent much of its recent past fending off bidders -in the form of Deutsche Bourse, Euronext and Macquarie -while watching its shares go from strength to strength. Nasdaq's approach looked set to go the same way. The US exchange provided another boost to the LSE share price but walked away rather than bid more than its £9.50 indicative price.
So why has it turned round weeks later and paid £11.75 a share for a 14.99 per cent stake? (Particularly given that it will now have to offer at least that amount if it makes a full offer in the next 12 months.)
It feels like Nasdaq could not bear the idea of being left out of a deal. Euronext is again sniffing around the LSE. Even worse would be the thought of Nasdaq's arch-rival, NYSE Group, doing a deal.
Nasdaq has bought an expensive seat at the table. From here, much depends on how LSE shareholders react. The shares closed at £10.385 on Tuesday. Nasdaq has set a new floor at £11.75. But the fact that Threadneedle, the largest shareholder, was willing to cash out also suggests it believes the best of the share price gains are over. If the LSE's shares do not run away from it, Nasdaq is likely to buy more in the market -allowing it to build a meaningful barrier against others wishing to snatch away its prize.
The game still has some way to run, but Nasdaq has made its commitment clear. With the US exchange breathing down its neck, and valuations looking frothy, the LSE is starting to run short of reasons for not selling out to the highest bidder."
So why has it turned round weeks later and paid £11.75 a share for a 14.99 per cent stake? (Particularly given that it will now have to offer at least that amount if it makes a full offer in the next 12 months.)
It feels like Nasdaq could not bear the idea of being left out of a deal. Euronext is again sniffing around the LSE. Even worse would be the thought of Nasdaq's arch-rival, NYSE Group, doing a deal.
Nasdaq has bought an expensive seat at the table. From here, much depends on how LSE shareholders react. The shares closed at £10.385 on Tuesday. Nasdaq has set a new floor at £11.75. But the fact that Threadneedle, the largest shareholder, was willing to cash out also suggests it believes the best of the share price gains are over. If the LSE's shares do not run away from it, Nasdaq is likely to buy more in the market -allowing it to build a meaningful barrier against others wishing to snatch away its prize.
The game still has some way to run, but Nasdaq has made its commitment clear. With the US exchange breathing down its neck, and valuations looking frothy, the LSE is starting to run short of reasons for not selling out to the highest bidder."
