Macquarie Bank's indicative offer for LSE rejected |
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Published
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Fri, 09 Dec 2005 09:40
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LONDON: Australia's Macquarie Bank has made an indicative cash offer of 580 pence a share for the London Stock Exchange, which the bourse has rejected as simply not up to its expectations.
The offer values the LSE at 1.48 billion pounds. The bank's head of European operations Jim Craig is understood to have met LSE's chief executive Clara Furse Thursday and sought details of its accounts for further discussions. LSE shares have been trading at 612 pence and some of the shareholders had quoted 700 pence a share as an acceptable value for a cash bid.
The Takeover Panel had issued a "put up or shut up" order to the bank asking it to make a firm offer by 15 December or withdraw interest.
The Macquarie Bank is the latest to enter the fray to buy the bourse, after Deutsche Borse started the process making a 530 pence-a-share offer a year ago. Subsequently, it received an offer from Euronext, but the Competition Commission wanted the firm to reduce its 41 per cent stake in clearing house clearing service LCH Clearnet before a clearance will be given. Deutsche Borse had subsequently withdrawn the offer.
According to sources, LSE executives told Macquarie officers and its advisers Goldman Sachs that the price offered is "incomprehensible" and the approach "ridiculous".
At the meeting yesterday Furse is learnt to have rejected the informal offer. Macquarie has been contending that the rapid rise in the exchange's share price has made it difficult to assess the fundamental value of the exchange. The LSE's share price has risen some 70 per cent since a year ago, after Deutsche Borse indicated its interest.
Analysts see Euronext as the most acceptable suitor, provided it agrees to the Competition Commission directives. The commission has given it time till February and in these circumstances any immediate action is unlikely.
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Australia’s Macquarie Bank buys Man Steam Packet Company 