Macquarie makes €2.2bn bid for LSE

AUSTRALIAN bank Macquarie went hostile yesterday with a €2.2 billion (£1.5bn) takeover bid for the London Stock Exchange that its target has already rejected as “derisory.”

Macquarie, whose British investments range from BBC Broadcast to the M6 Toll Road, put an offer worth 580p a share on the table just hours before a deadline set by the Takeover Panel expired.

The move turns up the pressure on the LSE board, which last week adopted an aggressive stance against Macquarie’s plans, claiming that they lacked any strategic or commercial credibility.

Analysts said that it may also flush out bids from the likes of Paris-based exchange Euronext or German rival Deutsche Boerse, which have shown an interest in the LSE in the past.

Macquarie said its offer was “full price” because the value of the exchange had been inflated by speculation since the news that it was considering an approach broke in August.

In contrast to Euronext and Deutsche Boerse, Macquarie said its bid would not be dogged by competition concerns and LSE investors would receive cash for their shares.

Analysts said the bid by Macquarie was unlikely to be successful at the current level as shares in the LSE were changing hands in the market at 618p and there was currently little chance of a recommendation from the LSE board.

But stockbroker Killik & Co said Macquarie was handling its position skilfully: “It retains the option to increase its bid if desired, and gains further time to attempt to win over the exchange’s customers and potentially find a bidding partner that can provide operational synergies.”

Macquarie, which has established MLX as its bid vehicle, said its decision to go hostile was taken after holding talks with shareholders of the exchange.

Customers were assured that Macquarie was a long-term investor and it was not planning to sweat the exchange for cash by hiking prices for broker or information services.

Independent directors would continue to comprise the majority of the LSE board and the exchange would keep its headquarters in London, the bank added.