Nasdaq promises LSE veto over stake sale

Nasdaq has agreed to seek the "tacit approval" of Clara Furse, chief executive of the London Stock Exchange, before it goes ahead with the sale of its minority stake in the bourse to any single buyer.

Since the New York exchange announced earlier this month that it may sell its 31 per cent holding – worth about £800m – speculation has been rampant that it could unload the stake to a rival exchange, triggering yet another takeover bid for the long-sought-after exchange.

According to sources close to the situation, advisors to the companies have agreed that Nasdaq would not shift the entire 31 per cent without first getting the informal blessing of the LSE. Nasdaq's holding is set to drop to 22 per cent once the LSE's tie-up with Borsa Italiana is sealed.

The names of various purported suitors for the stake including Deutsche Bourse, Singapore's state-owned investment group Temasek, ASX of Australia, NYSE-Euronext, and even Borse Dubai have all surfaced in press reports.

Nasdaq is not likely to sell its holding to a rival exchange, the sources said, because it could lead to a merger that would hurt Nasdaq's position in the industry. The agreement to seek the LSE's sign-off on the disposal would also give the New York exchange an added level of security that any sale will be deliverable and not opposed by the LSE.

Nasdaq announced on 20 August that it had hired UBS and JP Morgan to look for buyers for its LSE holding. Nasdaq has since turned its attention TO OMX, the Nordic exchange group for which it announced a recommended £1.86bn bid in May. Its decision to bail out of the LSE was hastened by a £2bn offer made by Borse Dubai that threatens to trump its takeover plan. There has been some speculation that Nasdaq could sell its LSE stake to Dubai in exchange for the emirate calling off its pursuit of OMX.