LSE defence to warn of Nasdaq debt

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The London Stock Exchange will publish a defence document this week outlining why its investors should reject the £2.7bn hostile bid launched by US stock exchange Nasdaq.

The LSE is expected to highlight its growing trading volumes and caution investors about the debt load the Nasdaq bid would hang on the combined entity. Credit rating agency Standard & Poor's has estimated that Nasdaq's debt would more than triple to $5.4bn if it bought the LSE. It also raised integration concerns.

LSE shares ended the week at £13.20 per share, well above the £12.43 that Nasdaq offered. Market sources believe that Nasdaq will achieve its goal of gaining control of the LSE by securing the support of investors holding 50 per cent of the exchange.

Nasdaq already owns 28.75 per cent of its London rival, meaning that it only needs the support of less than a third of the LSE's remaining investors.

The LSE has until 26 December to respond to the Nasdaq offer, but wants to publish its response before the market's holiday closure.