LSE: Panel slaps Nasdaq's wrist over raised bid report

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The Takeover Panel last night forced Nasdaq to "clarify" its position on the London Stock Exchange in the wake of reports that it could either raise its bid "by a few pennies" or set up a rival exchange in London.

It is understood that the statement was issued after the LSE complained about the content of the reports and what it believed had been said at meetings between Nasdaq representatives and LSE shareholders.

In its statement, Nasdaq was forced to reiterate that its £12.43 a share hostile "final offer" could only be raised in the event of a counter-bid or a recommendation from the LSE board, which has so far flatly refused requests for talks.

The US exchange also said it had made "no decisions" on what it would do with its 28.75 per cent stake in the LSE if its offer failed.

Reports suggested that it was threatening to sell its shares and set up a rival exchange in London, dashing the hopes of hedge funds which have been banking on a third Nasdaq bid for the LSE at a higher price in six months' time.

Nasdaq said options for the LSE stake "include selling all or a portion of the stake and/or competing directly with the London market" (either on its own or in co-operation with another party).

The US exchange also said that no decisions had been taken on charges to LSE users "other than the previous public statements that Nasdaq believes one of its primary responsibilities is to lower the total cost of trading for market users". However, the company reiterated its pledge not to increase standard LSE broker-dealer tariffs for at least three years after any deal.

The Nasdaq announcement came at 5.47pm yesterday evening - in an effort to minimise the attention given to it. However, the fact that it has been rapped over the knuckles by the Panel will be seen as embarrassing for the US exchange.

It is expected to file a fresh document to try to persuade LSE shareholders to accept its offer next week. The first closing date to accept the bid is 11 January although the company can, and will, extend that.

LSE shares have been drifting lower in recent days and closed down 4p at £12.83 yesterday.