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Last Updated: Friday, 17 February 2006, 10:06 GMT
LSE doubles investor cash payout
The headquarters of the London Stock Exchange
A number of buyers have been circling the LSE
The London Stock Exchange has said it will return more money to shareholders as it looks to fight off a hostile bid from Australia's Macquarie Bank.

To keep investors on its side, the LSE said it would double the amount of cash it was returning to 510m ($886m).

It also will buy back up to 50m worth of its shares, and raise the total full-year dividend by 71% to 12 pence.

At the same time, the stock exchange reiterated calls for shareholders to reject Macquarie's 1.5bn takeover bid.

The LSE's shares climbed 5.5% to 803.50 pence in morning trading on Friday.

'No value'

Electronic share trading has increased competition between exchanges and is driving consolidation in the industry, analysts said.

Macquarie's offer ... provides no value today and reflects no value tomorrow
Chris Gibson-Smith, LSE

The LSE has become a target for a number of bidders, including rivals Euronext and Deutsche Boerse, as the exchanges vie to become the major European stock market.

Macquarie has offered investors 580 pence for every LSE share, well below the stock's current 796p level.

The LSE called Macquarie's offer "ill-considered".

"The LSE has a unique strategic position and an exceptional customer franchise," said Chris Gibson-Smith, the company's chairman.

"Macquarie's offer recognises none of this. It provides no value today and reflects no value tomorrow."

The Australian lender has extended its offer twice, and investors now have until 26 February to decide whether or not accept it.

According to press reports, Macquire may be considering raising its bid, though that has not been confirmed by the bank.

Australian bank extends LSE offer
01 Feb 06 |  Business
LSE rejects 'derisory' takeover
09 Dec 05 |  Business
LSE seeks end to bid speculation
03 Nov 05 |  Business
LSE takeover bids worry watchdog
29 Jul 05 |  Business
D Boerse ditches LSE bid plans
07 Mar 05 |  Business
Euronext trumpets LSE bid savings
09 Feb 05 |  Business

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