Nasdaq may up its bid to hunt LSE

Dubai: Nasdaq Stock Market Inc will consider raising its bid for the London Stock Exchange if the LSE recommends a higher price or a rival bid emerges, the president of Nasdaq International said on Tuesday.

Nasdaq, which holds a 28.75 percent stake in the LSE, said on Monday it would pay 1,243 pence per share in cash for the rest of Europe's biggest stock market.

"It's the best final offer," Charlotte Crosswell told Reuters on the sidelines of a conference in Dubai.

"There are two circumstances for any change. If the LSE makes a recommendation or if there is competing bid," she said.

The LSE rejected Nasdaq's offer within seven hours, with Chief Executive Clara Furse saying it "fails to recognise the outstanding growth record and prospects of our group on a stand-alone basis".

However, Nasdaq Chief Executive Robert Greifeld is undeterred by the London Stock Exchange's rejection of a $5.1 billion unsolicited bid to buy Europe's biggest equity market.

The second-largest US stock market has fewer options now that NYSE Group Inc is poised to become the first trans-Atlantic equities exchange through its proposed combination with Euronext NV.

Greifeld became Nasdaq CEO three-years ago with a mandate to revitalize an enterprise pummeled by an ugly bear market and to expand its reputation beyond being a home for technology issues like Microsoft Corp. He needs this deal to convince investors that Nasdaq won't fall behind as financial markets consolidate.

"They are the crown jewel of the European market places," Greifeld said of the LSE in a Monday conference call with reporters. "We believe this is a powerful asset that is a natural partner with the Nasdaq. There is an increasingly clear path to the end game."

A Nasdaq-LSE combination would create the world's largest exchange by number of listings, with more than 6,400 companies carrying a market value of $11.8 trillion (€9.19 trillion). Monday's bid was the second that Nasdaq has made since March, and follows offers made by Deutsche Boerse AG, Sweden's OM Gruppen AB and Australia's Macquaire Bank Ltd since 2000. All have been turned down.

The swift rejection from LSE Chief Executive Clara Furse was expected; she said Nasdaq's offer undervalues the British exchange and "fails to recognize the outstanding growth record and prospects of our group on a stand-alone basis."

Greifeld, who calls the current offer fair and full, is strengthening Nasdaq's position by making his company the LSE's biggest shareholder. His company has accumulated a stake in the LSE since its first bid was rejected, and increased its holdings Monday to 28.75 percent, having obtained 7.1 million shares from what he described as a 'long-term shareholder'.

Securities markets worldwide have announced a flurry of deals during the past few years, the highlight being the New York Stock Exchange's move on Euronext. The exchanges are attempting to appease investors seeking lower costs for trades, and electronic trading that crosses time zones.

It also comes at a time when new markets are being created to lower costs for investors, and for the banks that do business with the exchanges. Last week, seven investment banks that include Citigroup Inc and Goldman Sachs Group Inc announced plans to start their own pan-European equity trading platform to challenge bourses that already control the market.