Qataris bid £1bn in battle for Nasdaq's stake in LSE

The near three-year long battle for control of the London Stock Exchange saw yet another unexpected twist this weekend, as it emerged that the Qatari Investment Authority (QIA) had entered the bidding for Nasdaq's 31 per cent stake in the company. The QIA, which has beenpursuing the supermarket chain Sainsbury's, is believed to have offered upwards of £14 a share for the stake, which would value it at close to £1bn, and would value the LSE as a whole at more than £3bn.

The bid will pit the Qataris against other interested parties from across the globe. ASX Australia, NYSE Euronext,the Singapore state-ownedinvestment fund Temasek, Deutsche Borse and BorseDubai have all been linkedwith potential bids for Nasdaq's stake in the British company.

However, reports at the weekend suggested that the LSE's chief executive, Clara Furse, is keen to avoid having another strategic investor on the share register, and wants to make it clear that any new investor will receive the same reception as Nasdaq if they attempt to bid for the entire company.

Nasdaq wants to sell its stake to fund its $3.7bn (£1.8bn) bidfor OMX, the Norwegian exchange group. Although its cash and shares bid for OMX was recommended by the board in May, it has since faced competition from Borse Dubai, which has made an all-cash $4bn counter-offer. Nasdaq wants to sell its stake in the LSE to give it additional flexibility to compete with the Dubai offer.

The sale will draw a line under Nasdaq's failed attempts to gain control of the LSE, which began last year. Ms Furse fought off the US exchange's £2.4bn offer in March 2006.

Nasdaq is believed to have agreed to seek the tacit approval of Ms Furse before accepting an offer for its exchange stake .

Since the LSE was first approached by Deutsche Borse in December 2004, its share price has increased more than three times from around 400p to 1,366p, where it closed on Friday, giving the company a market value of £2.735bn.