OM has released it formal Offer Document to LSE shareholders today, valuing the London Exchange at £820 million. The Swedish technology group's bid has been dismissed as 'derisory' by the LSE, which would prefer a merger with Germany's Deutsche Borse to create a new cross-border exchange, dubbed iX.
Per Larsson, president and CEO of OM, says iX would squander London's potential. Describing the LSE/Deutsche Borse merger proposal as "flawed and discredited", he promises: "Our offer today brings state-of-the-art technology, clarity, and real commercial drive that will secure London as Europe's leading exchange."
OM is offering LSE Shareholders 0.65 new OM Shares and £7.00 in cash for each LSE share held. On the basis of OM's closing share price of SEK437 on 8 September 2000, this values each LSE Share at £27.63 and LSE at approximately £820 million. The value of the Offer represents a premium of 17.6 per cent. to the closing price of an LSE Share on 25 August 2000 (the closing price prior to LSE's announcement of OM's approach).
OM is to seek the assistance of LSE shareholders in calling a general meeting to alter the exchange's Articles of Association, which currently prevent any person, or group of persons acting in concert, from holding more than 4.9 per cent of the voting rights in LSE.