Acquisitive Macquarie may yet bid for LSE-stakeholders

LONDON - Macquarie Bank may yet launch a bid for the London Stock Exchange (LSE) this week, if only to shore up its credibility in the UK where it may want to keep buying companies, stakeholders of the exchange said.

But some shareholders and users of the exchange think the chances of any bid remain very slim.

"I'd be surprised if anyone will succeed," said one LSE shareholder who declined to be named.

"I wouldn't support a bid."

The acquisitive Australian bank is consulting shareholders and users of the exchange so it can decide how to proceed ahead of a Thursday deadline set by the Takeover Panel.

Macquarie has been mulling an LSE bid since August and has said it is prepared to pay 580 pence a share, or £1.5 billion ($3.8 billion), for the exchange -- more than 5 per cent below the LSE's current share price.

"I think they definitely will bid but probably in line with market rumours around the 580 pence level," said one shareholder of the exchange, who declined to be named.

The exchange's top shareholder Threadneedle has bought shares at some 35 pence above Macquarie's indicated level, as has Lloyds TSB , indicating that a 580-pence-a-share offer may be rejected.

"I've even heard some shareholders talk about 800 pence a share for the exchange," said another fund manager, from a firm holding a small stake in the LSE and who declined to be named.

"Certainly any offer around 700 pence will get people to sit up and take notice."

Macquarie, which has a record of buying companies that occupy monopoly positions in regulated industries, already has interests in Birmingham and Bristol airports, South East Water and the M6 toll road.

The bank most recently made a bid for UK mid-cap stockbroker Bridgewell, while sources have said the bank has also approached brokerage Collins Stewart.

Macquarie was rejected in both cases, sources familiar with the situation said at the time.

But some fund managers reckoned that Macquarie's plan may have more to it than meets the eye.

"Having spent enough time digging around and having employed Goldman Sachs, who are familiar with the issues, I'd be pretty surprised if they didn't do something," said one shareholder, who declined to be named.

"But maybe this move will be something less obvious than we think."

One user of the exchange who declined to be named said Macquarie would bid this week.

"At least the Macquarie team can face the Board in Sydney and say we tried, but we weren't going to overpay," he said.

- REUTERS