Macquarie Bank of Australia has said in a statement to the Australian Stock Exchange that it is considering a joint bid for the London Stock Exchange.
The LSE continues to attract interest
The investment bank said any takeover bid would probably be in cash and as part of a consortium.
Macquarie has stressed that its deliberations are at an early stage.
The LSE has been viewed as a possible bid target for years. Other possible suitors include European exchange Euronext and Germany's Deutsche Boerse.
MACQUARIE BANK: KEY FACTS
Largest investment bank in Australia
Profits of $635m
Employs 6,500-plus staff
Set up by UK firm Hill Samuel
Became Macquarie Bank in 1985
Operates in 21 countries
UK interests include M6 motorway toll section
Shares in the London Stock Exchange closed up 4.7% to 578 pence in Monday trading after news of Macquarie's interest.
However, the LSE issued a statement saying that it had "received no formal approach from Macquarie Group".
It added that its strong first-quarter results "reinforce the Board's confidence in the Exchange's growth prospects as an independent group".
According to the Sunday Times, OMX - which operates stock markets in Scandinavia - may also be considering a bid.
Macquarie Bank, known as the "millionaires factory" because of the big bonuses it pays, began life as Hill Samuel Australia, after UK-based Hill Samuel established the firm.
It changed its name to Macquarie Bank in 1985 and was Australia's top mergers and acquisitions adviser in the first quarter of 2005.
"When you think about the fit of the London Stock Exchange with Macquarie's model, it does make sense," said Vanessa Beenders, a banking analyst with Commonwealth Securities in Sydney.
"It may be early days, but Macquarie is starting to play around with financial infrastructure assets," she told the BBC's World Business Report.
The Australian bank already has interests in UK assets including a toll section of the M6 motorway and airports in Bristol and Birmingham.
It manages 91bn Australian dollars of assets worldwide.
THE PURSUIT OF THE LSE
May 2001: LSE and Deutsche Boerse announce plans for pan-European bourse called iX
August 2001: Sweden's OMX bids for LSE, forcing it to withdraw from iX deal
September 2001: LSE bids for derivatives exchange LIFFE, which is eventually bought by Euronext
December 2004: Deutsche Boerse bid for LSE rejected, but door left open for more talks
December 2004: Euronext says it is also interested in bidding for LSE
January 2005: Deutsche Boerse sets out its bid
March 2005: Deutsche Boerse ditches LSE bid
July 2005: UK competition watchdog raises concerns over prospective bids
August 2005: Macquarie Bank considers a bid
Competing bids for the London Stock Exchange could drive up the price a successful bidder would have to pay, but some suitors may be ruled out by competition watchdogs.
Europe has only three major exchanges - the LSE, Deutsche Boerse and Euronext - and the UK Competition Commission has expressed concerns that a takeover by either Euronext or the Deutsche Boerse would lessen competition by leaving the buyer in control of the LSE's clearing services.
Germany's Deutsche Boerse abandoned a £1.3bn ($2.5bn) bid for the LSE in March after a revolt by shareholders, but it reserved the option of making another attempt.
Euronext combines the stock exchanges of Paris, Brussels, Amsterdam and Lisbon, as well as running the London-based international derivatives market Liffe.
It has said it would work closely with the Competition Commission to address any concerns but has yet to launch a formal bid.
"We're now certainly up to two potentially interested parties, Euronext and Macquarie," said Justin Bates, analyst at UK brokers Numis Securities.
"We have to assume a take-out value now above £6 (a share), given the way the business is trading.
"Clearly it's a prized asset."