The NASDAQ Stock Market Inc said yesterday it is looking at ways to offload its 31 percent stake in the London Stock Exchange Group PLC, reversing its earlier position that it did not intend to sell the shares.
NASDAQ, which built up the stake in the LSE during an acrimonious takeover attempt for the London bourse earlier this year, said it believed its current stock price does not adequately reflect the value of its stake in the LSE.
The LSE successfully fended off NASDAQ's US$5.3 billion offer in March and has since become a buyer itself, picking up Borsa Italiana SpA for 1.63 billion euros (US$2.19 billion).
There were some fears that NASDAQ -- which has since announced an offer for Nordic stock exchange OMX -- would use its stake to block the Borsa deal, but it let the deal pass while maintaining it had no plans to sell its shares in the LSE.
Reversing that position yesterday, it estimated that selling the stake would increase its stand-alone earnings per share for next year by approximately US$0.30 to US$0.35.
NASDAQ, which had been under pressure to find a European partner after its offer for the LSE failed, has since seen its offer for OMX challenged by Borse Dubai, which made a US$3.95 billion takeover bid for the Nordic bourse on Friday.
The US-based NASDAQ's financial results last year included US$20.9 million in expenses related to its failed acquisition effort for the LSE.
NASDAQ said it will use approximately US$1 billion of proceeds from any sale to retire senior term debt and plans to use the remainder to repurchase shares.
It added that there "can be no assurance that the exploration of sale alternatives for the stake will result in any transaction" and said it was under no obligation to make further announcements updating its progress on the exploration of sale options.
Shares in the LSE, which declined to comment on NASDAQ's move, rose 1.3 percent to £12.87 (US$25.56).
Stock exchanges around the world have been taking part in mergers and alliances in recent years to share the cost of implementing new technology and compete in an increasingly global market.
The New York Stock Exchange closed its US$14.3 billion acquisition of Euronext, the operator of the Paris, Amsterdam, Brussels and Lisbon exchanges, earlier this year to form the first cross-Atlantic marketplace.
In another project, seven investment banks, including Goldman Sachs and Citigroup Inc, have unveiled plans for a rival European platform of their own to challenge the likes of the LSE.
The London exchange was considered one of the crown jewels in the marketplace and has attracted considerable interest from around the globe -- Australia's Macquarie Bank Ltd, Euronext NV, Germany's Deutsche Bourse AG and Sweden's OM Gruppen have all failed in their tilts at Europe's largest and oldest exchange.