The US corporate raider Samuel Heyman bought the majority of his 8.8 per cent stake in the London Stock Exchange in the summer - but only had to reveal his interest this week because of Nasdaq's £2.7bn hostile takeover offer, it emerged yesterday.
Mr Heyman gained an exposure of nearly 8 per cent of the exchange's shares through contracts for difference at prices below £11.50 via two investment funds. This meant that he did not have to declare his interest because the exchange was not in a bid situation. Only when a company has a bid on the table do people holding stakes through derivatives such as CFDs have to show their hand.
Mr Heyman recently bought a further 1 per cent stake at around £12.91. He is now expected to open talks with both sides in the hope of persuading them to negotiate, an option firmly rejected by the London Stock Exchange which believes Nasdaq's offer "undervalues the business and its growth prospects".
Mr Heyman is said to have played a similar role in getting Arcelor executives to meet Lakshmi Mittal earlier this year, which ultimately resulted in Mittal Steel's successful $33.65bn takeover.
Several hedge funds have been buying shares at prices above £12.43, suggesting that they believe Nasdaq's offer is too low. Nasdaq has said it will only alter its "final offer" in the event of a counter bid or LSE board recommendation. LSE shares yesterday finished up 13p at £13.14, an all-time high.
Bankers have questioned Nasdaq's tactics in calling its hostile bid "a final offer", noting that the rarely-used tactic has failed on four previous occassions.
One said: "It is silly because usually investors expect a rise of 5 to 10 per cent after 45 days. Then they are often willing to do business. This way Nasdaq can't do that without a recommendation."
Most recently car dealer Pendragon failed with its "final" bid for rival Lookers, while Norwegian group Kvaerner's "final offer" for Amec failed in 1995.Reuse content