Nasdaq, the US exchange, wishes to divest its 31% stake in the London Stock Exchange (LSE). Nasdaq built up its stake earlier this year during the course of an unsuccessful takeover bid, and earlier in August backed an LSE/Borsa Italiana merger that will significantly dilute this holding.

Nasdaq said that it does not believe the current share price adequately reflects the value of its stake in the LSE, adding that it will use approximately $1bn from any sale to reduce long-term debt, and the remainder to repurchase shares.

The Guardian’s Nils Pratley (21 August) suggested Nasdaq’s about turn has been prompted by the danger of fresh humiliation, with the US exchange’s bid for OMX, the Scandinavian exchange, threatened by a competing offer from Borse Dubai.

 Pratley argued that should Bob Greifeld, Nasdaq’s chief executive, fail to secure OMX, his credibility as a buyer will be lost and Nasdaq will become prey not predator. Indeed, added Pratley, the obvious bidder for Nasdaq – allowing a decent interval and after Greifeld’s departure – would be the LSE itself.

 September 2007

Last Updated: 1 September 2007