The Nasdaq stock exchange was forced to admit last night that barely a handful of LSE shareholders had accepted its £12.43 a share hostile takeover bid despite in effect ruling out any chance of raising it.
Just 0.62 per cent of LSE shareholders had accepted at yesterday's second closing date in addition to the 28.75 per cent Nasdaq already owns, giving it a total of 29.37 per cent.
At the first closing date two weeks ago, Nasdaq had secured 0.61 per cent acceptances, taking its total to 29.36 per cent. The offer has been extended for another two weeks after which Nasdaq will be banned from bidding for another year if the bid fails.
Nasdaq's tactic of formally withdrawing the scope to revise its offer - except if a counter bidder comes in - was effected by an announcement through the LSE's regulatory news service.
It was seen as an attempt to put pressure on the LSE's hedge fund shareholders but appeared to have backfired, with the LSE's shares finishing up 12p at £12.95.
In its statement, Nasdaq said: "The board of the Nasdaq Stock Market announces that it has not been contacted by the board of the London Stock Exchange with respect to a recommended transaction.
"In Nasdaq's view there is now insufficient time to effect any revision of the final offers via constructive dialogue with the LSE and an LSE board recommendation by the deadline of midnight on Saturday 27 January."
The US exchange suffered a further blow as the LSE's second biggest shareholder, Samuel Heyman, took an interest in a further 200,000 shares at £12.86 a share, indicating he will not tender his shares to Nasdaq. Mr Heyman now owns 10.44 per cent of the LSE's shares.
One banker said: "The problem for the hedge funds is if they let Nasdaq face them down, then other bidders will think they can do the same thing. Given that, it is in the interests of the hedge funds to reject the bid."
An analyst said: "What has hurt [Bob] Greifeld [Nasdaq chief executive] is that most of those who were seeking a higher bid have been able to sell out. Those that remain have paid more than Nasdaq's offer and accept that they are in for the longer term."
That view was given credence as hedge funds privately voiced their confidence in the LSE's management.