Less than two weeks after dropping its bid for the London Stock Exchange, Nasdaq has become the UK market operator's largest shareholder after it bought a 14.99% stake in the business.
Shares in the LSE soared 15% to 1193.50 pence in early morning trading after Nasdaq said it had bought a 14.99% stake in the London exchange for £447.7 million.
In a statement, Nasdaq says it bought 38.1 million LSE shares for 1175 pence each. This includes a 12% stake held by Threadneedle Investments, formerly the LSE's largest institutional shareholder and a loyal supporter of the exchange's battle for independence. According to press reports Scottish Widows Investment Partnership ISwip) also sold 2.7 million shares to Nasdaq, reducing its shareholding in the UK exchange to 4.3%.
The news comes less than two weeks after the US exchange dropped its £2.43bn cash bid for the London exchange. The LSE board rejected the offer for being too low and refused to enter discussions. But Nasdaq left the door open for making another bid for the LSE in the future if a third party made a bid or if it could gain a recommendation from the LSE's board.
According to press reports, LSE chief executive Clara Furse has called for an urgent meeting with Nasdaq chief executive Robert Greifeld in a bid to discuss the latest move and establish Nasdaq's motives.
However, with a near 15% stake in the UK exchange, Nasdaq is now able to call an extraordinary meeting asking other LSE shareholders to vote on the possiblility of transatlantic merger. Analysts say the stake also gives Nasdaq a headstart in the event of a bidding war as any third party interested in launching a bid for the LSE would now have to talk to Nasdaq.