London - Nasdaq Stock Market yesterday made its second bid for London Stock Exchange Group (LSE) this year, an unsolicited offer that values Europe's biggest equity market at about £2.7 billion (R37 billion).
Nasdaq bid £12.43 a share in cash for the 75 percent of the exchange it did not already own, the firm said yesterday. The US exchange bought an additional 7.1 million shares and said it was seeking a meeting with LSE chairman Chris Gibson-Smith to secure a recommendation of its offer.
The London exchange has rebuffed four suitors since 2004, when Deutsche Börse started the bidding, provoking Euronext to declare its interest. The two were followed by Macquarie Bank of Sydney and by a £2.4 billion bid in March from Nasdaq that was rebuffed.
An LSE-Nasdaq combination would create a single market for stocks such as Microsoft and would give foreign firms a way to tap US investors without having to meet US regulatory requirements.
"Investors could be willing to go with a bid of between £13 and £13.50 a share from Nasdaq," said Mamoun Tazi, an analyst at Man Securities in London.
Nasdaq reserves the right to revise its offer if it gets a recommendation from the LSE or if another firm says it is planning to bid for the UK exchange.
"The £12.43 a share truly is a full and fair offer," Nasdaq Stock Market chief executive Robert Greifeld said, adding that he hoped to meet the LSE to discuss his offer.
"There is only one LSE and there is some rarity value there," said Roger Nightingale, a strategist at Millennium Global Investments. "Also, stock exchanges are making a lot of money these days so it may well be worth it."
Securities markets globally have announced about $35 billion (R254 billion) of combinations over the past two years as they seek to meet demand by investors for low-cost electronic trading of multiple securities in different time zones.
Last week, Deutsche Börse scrapped its offer to buy Euronext, clearing the way for the New York Stock Exchange Group to acquire the Paris-based exchange and create the first transatlantic stock market. - Bloomberg