LSE rejects second offer of takeover by Macquarie

LSE rejects second offer of takeover by Macquarie

	Published : Wed, 11 Jan 2006 16:45 By : Paula Demarzio Print this Story

LONDON: The London Stock Exchange rejected for the second time the hostile takeover attempt by Australia's Macquarie Bank, which posted the full details of its 1.5-billion-pound bid to the exchange's shareholders.

The exchange charged Macquarie of trying to buy it "on the cheap" and said the bank ignored the quality and strength of the exchange.

In December, the exchange had described the offer as "derisory".

Macquarie said Tuesday that it is determined to go ahead with the offer and said, "The offer of 580 pence in cash per LSE share is the only offer available to LSE shareholders." The shareholders have time up to 3.00 p.m. on 31 January to accept the offer.

Under the takeover rules in Britain, Macquarie has 60 days to win 50 per cent of the shareholders to get a mandate for the takeover.

The exchange appeared to be determined to scuttle the efforts of the bank as it advanced its announcement of third quarter results, saying it has posted a 16 per cent increase in the quarter revenues at 210.6 million pounds. Chief executive Clare Furse said such a performance "reinforces our dismissal of Macquarie's offer which entirely fails to recognise the value of the business".

Macquarie has investments in Britain in BBC Broadcast and M6 Toll Road.

The exchange's shares closed Tuesday at 615 pence, but Macquarie has been contending that the share price is inflated by the takeover speculation. It said the offer it gave was pitched at a 67 percent premium to the exchange's pre-bid speculation share price.

The exchange had earlier received unsolicited offers from Euronext and Deutsche Boerse too.

Macquarie said it plans to fund its bid with 300 million pounds of equity and about 1.3 billion pounds of debt it has access to. It assured the exchange's shareholders that the debt will not affect the exchange and it will not be required to repay the loans, which are underwritten by German bank Dresdner Kleinwort Wasserstein.