NASDAQ Stock Market Inc made its second bid for London Stock Exchange Group Plc this year, an unsolicited offer that values Europe's biggest equity market at about £2.7 billion (US$5.1 billion).
NASDAQ, the largest US electronic equity exchange, bid 1,243 pence a share in cash for the 75 percent of LSE it doesn't already own, the company said in a statement today. The US market bought an additional 7.1 million shares and said it's seeking a meeting with LSE's chairman Chris Gibson-Smith to secure a recommendation of its offer.
LSE chief executive officer Clara Furse rebuffed a £2.4 billion pound bid from NASDAQ in March.
The US exchange returned the following month and began accumulating a stake of about 25 percent in LSE. The London market had been the object of bids by Deutsche Boerse AG, Sydney-based investment bank Macquarie Bank Ltd and Euronext NV since December 2004.
"There is only one LSE and there is some rarity value there," said Roger Nightingale, a strategist at Millennium Global Investments in London, which oversees US$4.3 billion.
"Also, stock exchanges are making a lot of money these days so it may well be worth it," he said.
Securities markets worldwide have announced about US$35 billion of combinations over the past two years as they seek to meet growing demand by investors for low cost, electronic trading of multiple securities in different time zones.
Last week, Deutsche Boerse scrapped its offer to buy Euronext, clearing the way for NYSE Group Inc, NASDAQ's larger US rival, to acquire the Paris-based exchange and create the first trans-Atlantic stock market.
In another sign competition is set to intensify, seven investment banks including Citigroup Inc and Goldman Sachs Group Inc, are planning to start their own pan-European equity trading system to challenge traditional bourses such as LSE.