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year pursuit of London Stock Exchange
Published in Saudi Press Agency on 20 - 08 - 2007


Nasdaq Stock Market Inc. said Monday it
has finally abandoned hopes to acquire the London Stock
Exchange and will sell its 31 percent in the U.K. market to
focus on a takeover battle for Sweden's OMX AB, according to AP.
The second-largest U.S. stock exchange had made two
attempts to buy the LSE in as many years, each time being
soundly rejected by shareholders. Nasdaq executives had
maintained they were not interested in selling their stake,
holding out hope that some kind of agreement could be
worked out amid sweeping consolidation among global
exchanges.
Robert Greifeld, Nasdaq's chief executive, said he would
use the sale to unlock billions of dollars from the stake.
At least $1 billion (¤740 million) of the proceeds would be
used to retire debt and buy back shares, but some of the
cash would likely be pumped into Nasdaq's takeover battle
with Borse Dubai to acquire Stockholm-based OMX.
«We see that the European competitive landscape will
change, and change quite dramatically in the years to
come,» Greifeld told analysts and investors on a
conference call. He said the LSE stock price does not
adequately reflect the true value of the investment.
A spokesman for the LSE would not comment on the Nasdaq's
decision.
Greifeld, in Sweden this week to meet with OMX management
and shareholders, hinted there could be a strategic reason
for dumping the shares. Nasdaq has not ruled out
participating in a bid by seven investment banks, including
Goldman Sachs Group Inc. and Citigroup Inc., to build a
rival European stock-trading platform called «Project
Turquoise.»
Nasdaq and OMX could use their technology to help the
banks establish the platform, thereby challenging the
market dominance of the LSE, Germany's Deutsche Bourse AG
and the New York Stock Exchange. NYSE closed a $14.3
billion (¤10.6 billion) acquisition of Euronext, the
operator of the Paris, Amsterdam, Brussels and Lisbon
exchanges, earlier this year to form the first
cross-Atlantic marketplace.
The sale of LSE shares will not go to a single bidder, or
a group of bidders «acting in concert,» the Nasdaq said.
The London exchange has attracted interest from around the
globe _ including bids by both Deutsche Bourse AG and OMX.
The LSE fended off Nasdaq's $5.3 billion (¤3.9 billion)
offer in March and has since become a buyer itself, picking
up Borsa Italiana SpA for $2.19 billion (¤1.63 billion).
Nasdaq said it estimated that selling its LSE stake would
increase stand-alone earnings per share for 2008 by
approximately 30 cents to 35 cents.
Greifeld said Nasdaq would be willing to amend an offer to
acquire OMX, but warned it would «maintain our merger and
acquisition discipline with respect to both the price and
terms of our offer.» Dubai's $3.96 billion (¤2.94 billion)
hostile bid is about $355 million (¤263.5 million) more
than the Nasdaq's offer.
«From the conversations we've had, there is a strong
preference for the Nasdaq approach,» he said. «The
combined entity will strengthen the Nordic region, and be
an enhanced player on the European stage.»
He also said any takeover of OMX was not «directly
threatened in a short- or medium-term way by efforts such
as Project Turquoise.»
Nasdaq rose 58 cents to $32.45 (¤24.08) in afternoon
trading. LSE rose 2.4 percent to 1,301 pence in London
trading, while OMX rose 2.2 percent to 237 kronor.
Nasdaq paid about $1.33 billion (¤0.99 billion) for its
stake in the LSE, and it has produced investment gains of
about $333 million (¤247 million) because of favorable
currency conversions and a near 15 percent increase in LSE
shares. JPMorgan Chase & Co. and UBS AG will manage the
sale of the stake.
There has also been some speculation that Greifeld will
make a bid for a U.S. futures exchange, such as the New
York Mercantile Exchange or Atlanta-based InterContinental
Exchange Inc. NYSE Group Inc. has also shown interest in
acquiring a U.S. futures exchange, and has been said to be
in advanced talks with the New York Merc.


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