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Macquarie Bank mulls a cash offer for LSE
INFRASTRUCTURE:
The biggest bank in Australia, which is usually known for its investment in roads, airports and the like, is making a bid for the London Stock Exchange
AP, SYDNEY, AUSTRALIA
Tuesday, Aug 16, 2005, Page 12
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"Intuitively, the idea of buying a stock exchange to my way of thinking isn't too much different to actually buying a toll road."
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Brian Johnson, JP Morgan banking analyst
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Australia's biggest investment bank, Macquarie Bank Ltd, said yesterday it is considering making a cash bid for the London Stock Exchange PLC as part of a consortium.
Macquarie, which has previously focused its investment strategy around toll roads, airports and other infrastructure assets, said it is "considering a number of potential acquisition opportunities, which includes a possible formal approach being made to the London Stock Exchange."
In a statement to the Australian Stock Exchange, Macquarie said its deliberations are in "the most preliminary of stages" and there is no guarantee they will lead to a bid for Europe's largest stock market by the value of companies listed.
"If any bid were made, it would be as part of a consortium and if any such offer is made it is likely to be solely in cash," the company said, declining further comment.
Other potential investors include Euronext NV and Sweden's OMX AB, which has reportedly renewed its interest in the stock exchange after making an unsuccessful bid in 2000.
The London Stock Exchange rejected an offer last year from Deutsche Boerse worth ?1.4 billion (US$2.5 billion).
JP Morgan banking analyst Brian Johnson said the company's proposal fits within its current investment strategy.
"Intuitively, the idea of buying a stock exchange to my way of thinking isn't too much different to actually buying a toll road," Johnson said.
With a market value of A$14.3 billion (US$11 billion), Macquarie bank is Australia's 12th-largest company.
Long known in Asia as an investor in infrastructure projects, Macquarie and its associated investment funds have been increasingly active in Europe in recent months as the bank pursues an ambitious international expansion strategy.
Macquarie's earnings have soared as the bank takes fees from funds it manages around the world, with net profits for the 12 months ending March 31 up 67 percent to a record A$832 million.
Shareholders at the annual general meeting last month were told the first quarter result will be "well up" on last year, with an improved result possible in the year ending next March.
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