Big LSE backer ready to talk to US raiders
THREADNEEDLE Investment Management, the London Stock Exchange's largest shareholder, today signalled it was ready to talk terms over the possible sale of the market.
The Exchange is braced for a bid battle as the New York Stock Exchange draws up plans to rival an offer by the technology-based Nasdaq. Threadneedle, which owns almost 14% of the stock, said a meteoric rise in the LSE share price today meant its 'market valuation is beginning to reflect current realities'.
Threadneedle's head of equities Michael Taylor added: 'We are now willing to discuss proposals with interested parties.' Shares in the LSE, which stood at 350p just 18 months ago, today soared 253p, or 29%, to 1137p. This is a massive premium over the 950p-a-share, £2.4bn cash offer from Nasdaq that the LSE turned down on Friday.
It also left several analysts short with their upgraded price targets. Credit Suisse raised its target from 935p to 1050p while Numis went for 1100p. Michael Long of brokers Keefe, Bruyette & Woods said he reckoned Nasdaq could offer up to 1650p in a mixture of cash and shares without the bid damaging its earnings. At today's price, the LSE is capitalised at £2.86bn.
With Nasdaq mulling over whether to sweeten the deal with its own shares or even to list its stock in London, the New York Stock Exchange, emboldened by the performance of its newly-listed shares, confirmed that it had instructed Citigroup to prepare a possible approach to the LSE.
Nasdaq's 950p offer - at an 8% premium to Friday's close, double where the stock was 10 months ago and almost £4 a share higher than an offer from Australian group Macquarie before Christmas - was described by the LSE as 'unsolicited, unexpected and unwelcome'.
However, the bid may reignite plans for a merger with Paris-based Euronext, which is still said to be the preferred option of LSE chief executive Clara Furse.
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