LSE steps up fight against Nasdaq

The London Stock Exchange stepped up its fight against a hostile bid from Nasdaq Stock Markets Inc. yesterday, saying a big jump in earnings and confidence in the future justified its rejection of the bid.

The London Stock Exchange, Europe's largest share market, posted a 53 per cent rise in adjusted third-quarter earnings, boosted by a rise in trading volumes and the number of companies listing on its markets.

Adjusted basic earnings per share were 15 pence in the three months to December 31. Nine-month basic adjusted earnings were also up 53 per cent at 39.1 pence a share.

"We are confident of an excellent outcome for the current financial year and continuing strong business fundamentals should ensure a strong performance for the next financial year ending March 31, 2008," LSE said in a trading update.

"This excellent performance supports the board's rejection of Nasdaq's offer which significantly undervalues the business and the Exchange's unique strategic position," it said.

The bid from Nasdaq, which owns just under 30 per cent of the LSE, values the London exchange at £2.7 billion.

Nasdaq said in a statement it urged LSE shareholders to accept its "full and fair" offer.