Nasdaq says time up for LSE deal

Nasdaq Stock Market renounced the option of raising its hostile offer for the London Stock Exchange yesterday, leaving its fate with shareholders.

Nasdaq Stock Market owns almost 30 per cent of the LSE and is offering 1,243 pence a share in cash for the rest, valuing the operator at £2.7 billion.

Under UK takeover rules the bid has until February 10 either to lapse or go unconditional.

How many LSE shareholders have voted has not been announced.

The two exchanges have engaged in a war of words in recent weeks, with Nasdaq criticising the London exchange for refusing to discuss the prospect of an agreed takeover deal.

Any increased offer by Nasdaq for LSE would have to have be agreed by both companies.

Last week, LSE rejected the criticism, saying Nasdaq had not sought "constructive discussion with the exchange".

The pace of mergers is picking up among the world's stock exchanges as they come under pressure from customers to offer global services and cut fees. Competition is also becoming more intense, with a group of investment banks planning to create a pan-European equity trading platform this year.

The LSE has long been a takeover target, in part because of its relatively small market capitalisation compared with rivals. Its shares have more than trebled over the past two years as it has received and rejected a string of offers.

By 12:29 p.m., LSE shares were down 0.9 per cent at 1,270 pence, still above the 1,243 pence-a-share offer price from Nasdaq, but they have retreated from an all-time high of 1,311 pence as hopes of a higher offer wane.