Nasdaq has decided not to raise its 12.43 a share and 2.7 billion ($5.3bn) bid for the London Stock Exchange, according to the Financial Times.
The US group released a statement saying they had not been contacted by the LSE board and “there is now insufficient time to effect any revision of the final offers via constructive dialogue with LSE and an LSE board recommendation by the deadline of midnight [London time] on Saturday 27 January.”
The Board of the London Stock Exchange Group continue to reject Nasdaq’s “inadequate offer,” according to a press release on the Exchange’s Web site. Nasdaq’s interests are not aligned with the Exchange’s shareholders, and its criticism of the Exchange underlines its need to acquire it.
“The Exchange’s trading growth has exceeded that of all major listed equity and derivatives exchanges in Europe and the United States,” says Clara Furse, CEO of the Exchange. “Nasdaq’s approach is clearly intended to undermine the perception of the true value of the London Stock Exchange. Our shareholders deserve more.”
The press release says Nasdaq’s statements on the discussion between the two are incorrect. Since announcing the second approach, Nasdaq has not contacted the Exchange.
“The Board firmly believes that Nasdaq’s offer does not even give standalone value,” says Chris Gibson-Smith, chairman of the Exchange. “The Board will continue to defend steadfastly shareholders’ interests and we await any indication from Nasdaq regarding an offer price that the Board could recommend to shareholders. It is time for Nasdaq to shut up or put up.”
If this is the end of the road for Nasdaq and the LSE, commentators believe it is not the end of the road for Nasdaq and Europe. “This battle for the LSE may be coming to a conclusive milestone, but Nasdaq’s charge into Europe is by no means over,” says Cubillas Ding, senior analyst at Celent, a Boston-based financial research and consulting firm. “Following whatever outcome this week, Nasdaq may now need to face the possibility that they have to explore other routes to market and start executing on plan B, if this LSE deal does indeed fall through. With MiFID expected to drive the liberalization of the trading environment in European to new players, the opportunities are certainly there. Hence, I do not believe Nasdaq’s appetite to crack Europe again is likely to diminish.
Will history repeat itself? Nasdaq entered Europe at the turn of century and then pulled out of its European venture in 2003. It then sold off its technology assets to Easdaq (formerly Nasdaq Europe). Coming back this time around, I would expect Nasdaq US to be smarter in their go-to-market approach – establishing a venture from scratch in not likely to be a wise move. In that respect, one could ask (possibly speculate!) whether a player like Easdaq / Equiduct could be Nasdaq’s alternative go-to-market strategy. Whatever the case, doing nothing is not likely to be an option for Nasdaq, given that NYSE-Euronext is fast becoming a reality.”