Nasdaq CEO Bob Greifeld has taken the rapidly deteriorating dialogue with his bid target the London Stock Exchange to a new level by telling the Daily Telegraph that the American exchange was prepared to make its technology available to the investment baks behind Project Turquoise, a proposed pan-European equity trading platform. Greifeld said Nasdaq had held talks with the group.
The Nasdaq hostile bid for the LSE, valuing it at 2.7 billion ($5.3bn), has been rejected by the London Stock Exchange as “wholly inadequate,” and expires after an extension on 10 February. Greifeld said Nasdaq may hold on to its 28.75% stake in the LSE for at least 18 months if its bid fails, and then reassess.
If Nasdaq technology became available to Project Turquoise, Greifeld would in effect be helping to build a rival to the London Stock Exchange, with obvious implications for its share price.
“The revelation that Nasdaq met with the Project Turquoise consortium to potentially license the INET technology takes this hostile situation to another level,” says David Easthope, an analyst with Celent, the Boston-based financial research and consulting firm. “Whereas in the past the Nasdaq/LSE disagreement seemed to be over price, Nasdaq has now made the issue the future competitive position of the LSE across the whole of Europe. In a sense, Nasdaq has moved from trying to woo the LSE to threatening it by revealing that it is considering other routes into Europe such as directly licensing its technology or, perhaps, getting involved with Equiduct.”
“In 18 months’ time, we will know what is the fair value of the (LSE),” Greifeld told the Financial Times in a second interview with a London newspaper today. “It’s a monopoly business today. It won’t be a monopoly business tomorrow.”
The members of Project Turquoise include Citigroup, Goldman Sachs, Merrill Lynch and Deutsche Bank.