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LONDON - US stock exchange Nasdaq launched a US$5.1 billion ($7.6 billion) bid for the London Stock Exchange last night.
Nasdaq, which had built up a 25 per cent stake after a previous bid was rebuffed, said it was offering to pay 1243 pence a share in cash for the rest of the company, Europe's biggest stockmarket.
The second-biggest US stock exchange also said it had increased its stake to 28.75 per cent by buying a further seven million LSE shares at 1243 pence each, at a cost of £87.8 million ($250 million).
Nasdaq's new bid is 40 per cent above its previous offer in March, but close to the level at which the second biggest US stock market paid for most of its stake.
Nasdaq said the deal would create the world's biggest exchange by number of listings, including more than 6400 companies with a market value of US$11.8 trillion, as well as the most active exchange with an average daily volume of 7.4 billion shares traded.
No one at the LSE was immediately available to comment.
The world's stock markets are rushing to consolidate, under pressure from customers to cut fees and offer global services, and a group of banks added to the pressure last week by announcing plans to create their own pan-European equity trading platform next year.
Also last week Deutsche Boerse dropped a US$10 billion bid for Euronext, dashing French and German hopes for an all-European mega-exchange and clearing the way for New York Stock Exchange operator NYSE Group's agreed bid for Euronext, operator of the Paris, Amsterdam, Brussels and Lisbon stockmarkets.
"This is perfect timing after last week's turmoil with the exchanges and people were short on the stock," said a dealer who declined to be named.
"This is the minimum price that Nasdaq would have to pay and there's no reason for it to pay up and I don't think anyone else is going to take a shot at it. About 30 per cent of the LSE is owned by hedge funds who were awaiting a bid and a lot of people will sell out now."
The LSE has long been viewed as a takeover target because it is a relatively small company, compared with many of its rivals which have branched into other trading platforms.
However, the firm has rejected approaches from all of its suitors to date.
Nasdaq said the London exchange would continue to be regulated solely in Britain.
- BLOOMBERG
