Nasdaq bid in final stages as LSE deadline nears

Nasdaq’s hostile bid battle for the London Stock Exchange was in its final stages today as the deadline neared for acceptances to its £2.7bn (€4bn) offer.

The US exchange has until 1pm tomorrow to secure backing from LSE shareholders - a deadline that has been extended twice already after Nasdaq gained support from less than 1% of investors.

Nasdaq, which already owns a 28.8% stake in the LSE, is widely expected to fail again to win over the 21% of shareholders it needs to control 50% of the London exchange as the LSE puts up a robust defence.

Nasdaq chief executive Bob Greifeld gave a signal earlier this month that it had already admitted defeat when he pledged to wage a long-term battle for the LSE.

He said Nasdaq could hold on to its stake for up to 18 months, which could scupper tie-ups between the London exchange and other bourses.

Earlier in the takeover tussle Nasdaq had threatened to sell its 29% holding if the bid failed.

Nasdaq has also warned it could join forces with the consortium of banks that are planning a rival platform to the LSE, known as Project Turquoise.

Mr Greifeld has claimed to have met the consortium and was considering leasing the platform its technology.

Nasdaq believes its 1243p a share offer is fair and has said that incoming European regulations, known as Mifid, will open up European exchanges to competition, putting pressure on the LSE’s share price.

Shares in the LSE have soared since Nasdaq made its first unsolicited takeover approach last March for the initial sum of £2.4 billion, rocketing from 850p a share to a peak of nearly 1350p earlier this month.

The LSE has defended its value with strong forecasts for trading levels and has made moves to woo shareholders with plans to return a further £250 million to shareholders in a buy-back scheme.

However Keefe, Bruyette and Woods analyst Michael Long said the LSE’s shares were overpriced.

He said: “The LSE’s shares are overvalued, but it’s difficult to call because the LSE has such aggressive plans for growth in its trading volumes and every other exchange is strongly valued as well.”

LSE shares were off 15p to 1267p today ahead of the bid closing date.