Nasdaq quits bidding for London bourse |
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Thu, 30 Mar 2006 12:40
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LONDON: The Nasdaq Stock Market Inc. has withdrawn its 2.4-billion-pound bid for the London Stock Exchange after having rejected by the management of the London bourse, it said Thursday.
In a statement, Nasdaq said it no longer intends to make an offer for the LSE. However, sources in the know said the U.S. No 2 exchange has left an offer of a tie-up in future, especially when a rival bidder emerges for the LSE. It has also reserved its right to re-enter the bid process in case LSE board changed its mind.
Analysts reacted to the news saying basically Nasdaq was overawed by the sudden rise in LSE's stock price since the proposal was made public and it had no other go but to withdraw. The technology-focused exchange, in its attempt to rival the No 1 U.S. stock exchange, the New York Stock Exchange, has been planning a transatlantic venture.
The LSE shares have reached as high a price as 1,219-1/2 pence ever since the approach was made on the hopes that Nasdaq may hike its offer or a possible rival may come on the scene.
LSE had rejected Nasdaq's 950-pence-a-share proposal as too low, although some of the shareholders had favoured it saying it is close to a realistic price the exchange can expect. At least two of its largest shareholders, Threadneedle Investments and Scottish Widows, were willing to meet Nasdaq to discuss the offer.
Earlier, in February, LSE had successfully warded off an hostile attempt by Australia's Macquarie Bank offering 580 pence-a-share. The other bidders for the exchange were Deutsche Boerse, which withdrew its offer after failing to get a recommendation from the LSE management, and transnational European exchange Euronext.
As it fought Macquarie Bank, the board of the exchange promised to return as much as 510 million pounds to its shareholders in order to remain independent.
The New York Stock Exchange too is seen as a suitor, but the exchange is now engaged in the process of integrating Archipelago, which it had acquired recently, and preparing a secondary offering of its shares.
An LSE-Nasdaq combination would have created a single marketplace for global stocks like Microsoft Corp. and BP Plc, and would have given foreign companies an easier approach to American investors without having to meet U.S. regulatory requirements. The two together have a listing of more than 6,000 companies with a total value of $7.3 trillion. The New York Stock Exchange has a listing by 2,700 companies, but these companies have a market value of $13.8 trillion.
Shares in the LSE fell 10 per cent in initial trading Thursday, but recovered slightly to 10.27 pounds.
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US, European markets bounce back after black Thursday 