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LONDON (AFX) - NASDAQ Stock Market Inc, the US stock exchange, has made a 2.9 bln stg offer for the London Stock Exchange Group PLC.
It is offering 1,243 pence for each ordinary share -- worth 2.7 bln stg -- and 200 pence per 'B' share, worth 16.5 mln stg. Including debt, the bid has an enterprise value of 2.9 bln stg.
Nasdaq said the offer represents a 54 pct premium over the closing price on March 10, when it first approached the LSE about a takeover. The US company added that it would be looking for a secondary listing in London after the LSE takeover.
On March 9 Nasdaq made an initial 2.4 bln stg offer for the exchange, which was rejected by the LSE as being too low. It withdrew its bid on March 30.
Nasdaq said in a statement that it appreciates LSE's strong standalone growth prospects, particularly recognising the growth in Stock Exchange Electronic Trading Service (SETS) volumes of 56 pct.
'The two strong, yet distinct, brands of LSE and NASDAQ will together yield stronger competitive benefits to both the London and the New York financial centres,' Nasdaq added in a statement.
The exchange added that it is submitting a filing to the Office of Fair Trading about the transaction, and that it does not expect the transaction to give rise to any significant antitrust issues.
Robert Greifeld, Nasdaq's chief executive, told reporters on a telephone conference call that he believed that the 'price was in line with the fully-priced value of the exchange'.
He added that Nasdaq's bid plans were sped up by news that seven investment banks were planning their own stock-trading platform -- called Project Turquoise-- which should strip out a massive amount of trades from the exchanges. 'With the new exchange plans we felt that it was important for consolidation to take place.'
He added that he had already contacted Christopher Gibson-Smith, the LSE's chairman about the bid, and was hoping for a meeting later today. 'It is important for us to engage the LSE in discussions. We talked to the chairman earlier today and requested a meeting.'
'Chris is a professional and we expect to talk to him.'
Greifeld added that if the takeover was successful he still envisaged roles for Clara Furse, LSE's chief executive, and the rest of the board.
Analysts were mixed on the news.
'James Hamilton at Numis Securities told AFX News that the LSE should 'take the money.'
'While the offer's not much of a premium,' he said, 'it's still double what it was a year ago. With Nasdaq's stake no-one will come in and buy at a significantly bigger premium, and the LSE has one option and that's to sell.'
Richard Hunter at Hargreaves Lansdown said that the offer was unexpected. 'Judging by their recent results I got the impression that the LSE wanted to retain their independence,' he said. 'But when your shareholders have got a 25 pct stake then things might become different.'
Nathan Wong, an analyst at Merrill Lynch wrote in a note to investors that it was 'not obvious whether counter-bidder would emerge given that we believe other potential bidders are perhaps pre-occupied with their own endeavours.'
Meanwhile, NASDAQ also announced today that it has added to its shareholding in LSE, buying 7.1 mln ordinary shares for 1,243 pence each. It now holds a 28.75 pct shareholding in the exchange.
At 9.35 am LSE shares were up 73 pence, or 6 pct, at 1,291.
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