Nasdaq makes bid for rest of London Stock Exchange

LSE shares traded at 12.85 pounds ($24.36) in Monday morning trading.

The LSE declined to comment on the bid.

Nasdaq said it was seeking a meeting with LSE Chairman Chris Gibson-Smith in a bid to get board approval.

Companies with a value of more than 6.3 trillion pounds ($11.8 trillion) would be traded on a combined Nasdaq-LSE market.

''The combined entity will be well positioned to lead further consolidation and compete effectively with any trans-Atlantic or European combination,'' the company said.

Katrina Preston, an analyst at Bridgewell Securities, said the LSE was likely to reject the offer, arguing that it ''does not represent sufficient value compared with trading valuations of rival exchanges.''

But Fox-Pitt Kelton analyst Andrew Mitchell said the bid was shrewdly timed following last week's slump in the share price below 13 pounds, and that it would be ''difficult for London to defend itself.''

Earlier this year, Nasdaq made an offer of 9.50 pounds per share for the LSE, but abruptly withdrew in March.

Australia's Macquarie Bank Ltd., Germany's Deutsche Bourse AG and Sweden's OM Gruppen have all failed in previous overtures to take over Europe's oldest exchange.

Mitchell said Nasdaq has no obvious rivals this time around.

''Deutsche Boerse attempted before at a much lower level and you can't rule them out entirely, but they are an unlikely candidate,'' he said.

The New York Stock Exchange owner, NYSE Group Inc., agreed in June to pay $9.96 billion for Euronext, which operates the Paris, Amsterdam, Brussels and Lisbon exchanges. The bid subsequently rose to $13 billion.

The combined revenue of Nasdaq and LSE would be about $1.4 billion, based on their last set of full-year results. That compares with about $2.3 billion for NYSE-Euronext.

Nasdaq Chairman and Chief Executive Robert Greifeld said he wasn't concerned about last week's news that seven major investment banks -- Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, Goldman Sachs Group Inc., Merrill Lynch & Co., Morgan Stanley and UBS AG -- plan to launch their own European equities exchange next year.

''It's important to note that Nasdaq was not born through a historical monopoly. It has had to compete. We clearly have our competitive instincts engaged,'' Greifeld told reporters.

Greifeld said Nasdaq would cut transaction fees as trading volumes rise.

''That will be a hallmark of the combined entity,'' he said.

Analyst David Buik of Cantor Index said the investment banks' plan was a strong reason for a Nasdaq-LSE tie-up.

''The ramifications of dismissing Nasdaq's overtures could be serious,'' Buik said, adding that bourses must cut their fees to remain competitive.

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