Top > Business > 2006 > November > 2006-11-25

NASDAQ Offers $5.1 Billion for LSE

LSE shares soared from $23.05 to $24.25 after news of NASDAQ`s bid to purchase LSE at $23.5 a share totaling $5.1 billion, the same price it paid for 25.3% earlier this year. This bid comes following a LSE share price dropped to $22.41 a share after Goldman Sachs and Citigroup announced plans to open a pan-European trading platform that would compete with the LSE. A spokesperson for NASDAQ said: "NASDAQ believes this potential, as well as the significant synergy benefits of a combination, are fully reflected in its offer price."

NASDAQ said it would not increase it offer unless the LSE board gives it recommendations for the buyout or a rival bid is given. The bid is a bit lower then current trading price. This represents the fact that while the LSE stock price has risen in the past two years by 216% its income has only grown by 75% in the same two years.

A merger between the LSE and the NASDAQ if completed would create the largest global exchange by number of listings, with over 6,400 companies listed with a total market value of $12 trillion and daily trading volumes of approximately $78.6 billion. NASDAQ adds that it would keep the LSE`s headquarters in London and that the stock exchange will still be regulated by the UK Financial Services. NASDAQ said it has held discussions with the UK Financial Services and reports that it will meet all regulatory obligations the organization requires. Robert Greifeild, NASDAQ president said: "We are excited about the prospect of combining two strong businesses to form the leading global, cross-border equity market platform giving issuers the ability to dual-list simultaneously in London and New York."