Sunday, September 10, 2006
NASDAQ & LSE - Citigroup research
Nasdaq may pursue London Stock Exchange deal after May 2007 - research report
StoryNasdaq Stock Market, the listed New York stock exchange, could wait until May 2007 to make an offer for the London Stock Exchange, Citigroup reports.
Citigroup made the remarks in a 6 September research report, in which it ranked Nasdaq shares as 'hold' and 'high risk.'
The report discussed Nasdaq's ability to bid, as of October, on the roughly 75% of LSE that it does not presently own. While Nasdaq could move forward in the short term in a hostile bid, Citigroup said it sees a 'low probability' of this happening.
Instead, Citigroup indicated its analysts consider it 'likely' that it will be May 2007 before Nasdaq considers bidding. At that point, Nasdaq can present a 'full offer' for LSE.
Under current conditions, in the short term Nasdaq would have to offer a minimum 1,243 pence per LSE share. Citigroup said that Nasdaq could offer 1,300 pence per share and achieve a deal that would be accretive to 2007 earnings by 17%. However, the report said it considers the possibility of Nasdaq offering over 1,500 pence per share 'unrealistic.'
The report said there are hurdles to a potential deal, including Nasdaq's current debt level and stock price, European investor sentiment, and LSE management's lack of demonstrated interest. This last factor, the report said, may indicate LSE prefers other suitors or wants to remain independent.
Nasdaq has a USD 4.3bn market cap, according to the report. The company had previously offered USD 4.5bn f"
StoryNasdaq Stock Market, the listed New York stock exchange, could wait until May 2007 to make an offer for the London Stock Exchange, Citigroup reports.
Citigroup made the remarks in a 6 September research report, in which it ranked Nasdaq shares as 'hold' and 'high risk.'
The report discussed Nasdaq's ability to bid, as of October, on the roughly 75% of LSE that it does not presently own. While Nasdaq could move forward in the short term in a hostile bid, Citigroup said it sees a 'low probability' of this happening.
Instead, Citigroup indicated its analysts consider it 'likely' that it will be May 2007 before Nasdaq considers bidding. At that point, Nasdaq can present a 'full offer' for LSE.
Under current conditions, in the short term Nasdaq would have to offer a minimum 1,243 pence per LSE share. Citigroup said that Nasdaq could offer 1,300 pence per share and achieve a deal that would be accretive to 2007 earnings by 17%. However, the report said it considers the possibility of Nasdaq offering over 1,500 pence per share 'unrealistic.'
The report said there are hurdles to a potential deal, including Nasdaq's current debt level and stock price, European investor sentiment, and LSE management's lack of demonstrated interest. This last factor, the report said, may indicate LSE prefers other suitors or wants to remain independent.
Nasdaq has a USD 4.3bn market cap, according to the report. The company had previously offered USD 4.5bn f"
