Friday, October 13, 2006

LSE & Nasdaq: update

A bit of an update on the exchange merger front. FT reports that Nasdaq could take control of the LSE going if hedge funds tender their 20 percent stake at £13. That stake, when combined with the 25.3 percent share of the LSE Nasdaq already owns, could clear the way for a takeover.

Will Nasdaq get their deal or will another bidder swoop in to take the prize? Andrew Hill, reporting for the October 11 edition of the Financial Times, had this to say:

At the moment, a bid from Nasdaq represents LSE investors' only realistic exit. If the US exchange can afford it - a big if - that leaves only one question: will Nasdaq bide its time until next May, when the floor on its bid price drops away, or step in earlier?

It seems that Nasdaq is now in a stronger position to take control, or are perceived to have an advantage that did not exist last May when their credit rating was cut to junk status by S&P. More to come, as it unfolds.