Macquarie Bank seems to be serious about LSE takeover |
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Mon, 12 Dec 2005 20:05
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LONDON: Australian investment bank Macquarie Bank, which had earlier given an indicative offer for the London Stock Exchange, is understood to be considering launching a hostile takeover bid ahead of the 15 December deadline set by Britain's Takeover Panel.
The bank and its advisers, Goldman Sachs, have now access to the books of the stock exchange for a due diligence and the bank plans to hold a meeting with the Association of Private Client Investment Managers and Stockbrokers (Apcims) and the London Investment Banking Association, which represent the exchange's big-time users, to sell its offer.
There are rumours afloat that the bank will make a firm offer through an infrastructure trust vehicle and involve some other investors and it could be as much as 630 pence-a-share -- 500 million pounds of equity and 1 billion pounds in debt.
It is said to be having the backing of Dresdner Kelinwort Wasserstein, which is funding it with a 1 billion-pound debt. However, sources close to the bank said it is still not clear whether the bank will increase the 580 pence-a-share offer, which the LSE had rejected Friday.
The bank is also expected to come out with an analysis of the exchange's business prospects, claiming the fair value for its shares is closer to 5 pounds each, rather than 6 pounds.
Meanwhile, there is apprehension among LSE users that the bank may increase the exchange charges if the bid goes through in order to finance the debt.
The LSE shareholders are of the view that the exchange can generate enough cash to justify its existence as a stand-alone company. It has revealed plans to return 250 million pounds to shareholders after the current bid sessions ends and further repurchase of shares.
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