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Last Updated: Thursday, 15 December 2005, 19:25 GMT
LSE rejects Australian bank bid
The headquarters of the London Stock Exchange
The LSE previously rejected the bid as too low
The London Stock Exchange (LSE) has rejected a formal takeover bid from Australia's Macquarie Bank, valuing the company at about 1.5bn ($2.7bn).

Macquarie had first proposed the 580 pence a share bid last week.

As it had done with the informal proposal, the LSE rejected Macquarie's approach as "derisory", calling it "wholly inadequate".

Macquarie said its decision to go hostile was taken after holding talks with shareholders of the exchange.

The bank said its 580p-a-share offer represented "attractive value" for the stock exchange.

The LSE, however, said the offer was "at a discount to the LSE's standalone value before any takeover premium".

Macquarie has so far declined to say whether a higher bid might be forthcoming.

But it did say it said believed the takeover offer would not create any major competition concerns.

It plans to allow the LSE to continued to be managed in London, and said it had no intention of introducing major increases in prices charged for broker or information services.

String of suitors

The LSE has been the centre of constant bid speculation since the end of last year as exchanges look to expand and create pan-regional markets in an effort to cut costs, lower fees and boost profits.

Largest investment bank in Australia
Pre-tax profits 2004/05: 1.1bn Australian dollars (495m; $880m)
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 toll road and BBC Broadcast

In December last year, Germany's Deutsche Boerse made a 1.3bn ($2.5bn) offer for the LSE, but this was dropped after opposition from its own shareholders.

Rival Euronext, which operates several European exchanges including the Paris exchange, has also been considering a bid.

Macquarie's approach came as a surprise as the bank has no previous experience in stock markets.

Race to deadline

Australia's largest investment bank narrowly made the 15 December deadline set by the UK's Takeover Panel for the bank to come forward with a formal bid or face a six-month wait for another chance.

MLX will continue to seek a recommendation from the board of the LSE
Macquarie statement

Macquarie formed a takeover vehicle, MLX, to launch the bid.

"MLX regrets that the board of the LSE has refused to engage in substantive discussions despite the terms proposed by MLX," its statement said.

"MLX will continue to seek a recommendation from the board of the LSE."

Although Macquarie's bid trumps Deutsche Boerse's earlier offer of 530p per share, it is still below the LSE's recent share price peak of 620p.

Shares in LSE closed 2 pence, or 0.32%, lower at 620p on Thursday.

LSE rejects 'derisory' takeover
09 Dec 05 |  Business
LSE seeks end to bid speculation
03 Nov 05 |  Business
LSE takeover conditions set out
01 Nov 05 |  Business
Australian bank considers LSE bid
15 Aug 05 |  Business
D Boerse ditches LSE bid plans
07 Mar 05 |  Business

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