Nasdaq blocked a proposal at the LSE’s annual meeting that would have allowed the London bourse to issue roughly enough new shares to buy Borsa Italiana, as it proposed to do last month, The Financial Times reports.
Nasdaq launched a failed bid for the LSE late last year that the London exchange’s own management refused even to consider on the grounds that it so undervalued the company it was not worth discussing.
Chris Gibson-Smith, LSE chairman, reiterated that view yesterday, telling shareholders the company’s strong performance supported the board’s view that the Nasdaq bid had been “inadequate”.
Nasdaq cited corporate governance principles as the reason for its opposition. “Nasdaq appears to be taking a principled stance against our corporate governance,” the LSE said.
Bob Greifeld, Nasdaq’s chief executive, has formally requested a meeting with Clara Furse, his LSE counterpart, to discuss the merits of the Borsa transaction.
Ms Furse yesterday dismissed as “nonsense” any suggestion that the merger was intended to act as a poison pill against any future bid attempts by the US exchange. A tie-up with Borsa Italiana would dilute Nasdaq’s holding to about 22 per cent.
The LSE will post a circular to shareholders about the Borsa Italiana transaction this month and hold a special meeting to approve it in the first half of August.
“We believe we will have more than sufficient shareholder support for this proposition,” says Ms Furse.