LSE to open books to 'derisory' Macquarie

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The acquisitive Australian investment bank Macquarie will pore over the books of the London Stock Exchange this weekend to decide whether to table a formal bid.

The Exchange dismissed the Australians' 580p-a-share approach on Thursday as "derisory", but acceded last night to Macquarie's request for the same financial information granted to previous suitors, Deutsche Borse and Paris-based Euronext.

Macquarie has until Thursday to table a formal offer for the LSE or else walk away for at least six months.

Macquarie's informal approach received short shrift from the Exchange's management and biggest investors.

It was pitched well below the current price of LSE shares, which advanced a further 7p to 619p yesterday as the City bet that Macquarie would dig deeper before next week's deadline imposed by the Takeover Panel.

The Exchange said in a statement: "The board of the London Stock Exchange rejects outright this derisory proposal, which fundamentally undervalue the company and lacks any strategic or commercial credibility."

Macquarie, which has been stalking the Exchange for three months, stressed that the £1.5bn approach was merely an opening salvo to spark a dialogue about a possible offer.

The bank still reckoned that it was difficult to put a realistic price on the LSE because the shares now contained a big bid premium.

Macquarie, which is being advised by Goldman Sachs, also pointed out that its offer was for cash and, unlike Euronext, it would not come up against competition problems.

It also pitched a hefty premium to the 530p offered by Germany's Deutsche Borse last year.

Some in the City simply see Macquarie's opening gambit as a tactic to buy more time from the Panel to put together a bid consortium.

Others reckoned the Australian bank was preparing to drop its interest altogether after LSE shares showed little sign of slipping.

At their present rating, Macquarie may struggle to make the numbers add up.

For its part, the LSE has repeatedly stressed that it does not need a deal and would prefer to remain independent.

However, it is widely thought that the LSE would readily seek a tie-up with the Scandinavian exchange group OMX should a takeover by Macquarie loom.

Meanwhile, London again demonstrated its allure yesterday to companies looking to raise cash when trading began in shares of four companies worth a total of £1.3bn.

"Float Friday" took the amount raised on the London market this year to just shy of £13.4bn, according to the research group Dealogic.

The soft drinks giant Britvic, the Russian steel group Novolipetsk, Equest Balkan Properties and Dawnay Day Treveria, investment guru Guy Naggar's latest vehicle, all made their London debut yesterday.

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