The London Stock Exchange is braced for opposition from Nasdaq, its biggest shareholder, to its proposed 1.6 billion (1.1 billion) purchase of Borsa Italiana of Milan after a meeting in New York, The Times reports.
Clara Furse, the LSE chief executive, and her board have been putting to shareholders the merits of the deal ahead of a vote at an extraordinary meeting in London on August 8.
Senior managers of the LSE and Nasdaq met in New York this week. They are thought to include Bob Greifeld, Ms Furse’s counterpart at the New York market, and there are indications that Nasdaq may not be inclined to support the deal.
However, the LSE has always insisted that it has the backing of a sufficient number of its other shareholders, which include three US funds that control 30 per cent between them, to gain the necessary 50 per cent-plus majority at the meeting.
However, a source close to the negotiations said the impression given was that the New Yorkers were inclined to vote against the Borsa offer. “They have been very unpredictable,” he says. Nasdaq insisted: “We continue to evaluate the proposed transaction.”
Although Ms Furse is insistent that the reason for merging with Borsa Italiana is entirely commercial and brings benefits to both parties, including cost savings of 20 million a year and further revenue synergies of another 20 million, it would also have the effect of diluting the Nasdaq holding to about 22 per cent.