LSE doubles cash back to shareholders |
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Published
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Fri, 17 Feb 2006 13:15
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LONDON: The London Stock Exchange is doubling the money it is planning to pay back its shareholders to 510 million pounds as part of its strategy to ward off the hostile acquisition bid by Australia's investment bank Macquarie Bank.
The exchange will also buy back up to 50 million pounds worth of shares each year after returning the cash and raise its full year dividend by 71 per cent to 12 pence, it said in a statement Friday.
Macquarie has time until 26 February to raise its 580-pence-a-share cash offer for the exchange. Sources say the Australian bank does not rule out increasing the offer. LSE's shares are now being traded at 761-1/2 pence, giving the exchange a value of 1.94 billion pounds.
The exchange's chairman Chris Gibson-Smith said the exchange's strong trading performance is delivering excellent financial results, which enables it to announce an increased capital return and significantly increased dividend. He added that Macquarie's offer does not recognise any of these. "It provides no value today and reflects no value tomorrow. Shareholders should continue to reject the offer," he added in the statement.
LSE had rejected Macquarie's 1.5-billion-pound offer, citing its earnings are booming and the price quoted is not attractive. Macquarie has been sticking to the offer contending that the exchange is worth 500 pence a share and is "a low-growth business".
Macquarie owns assets in Britain's M6 toll road. It has the support of hedge funds Centaurus and CQS, and Finpro of Portugal, in the bid.
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