LSE defences bolstered by bullish trading statement

LSE defences bolstered by bullish trading statement

The London Stock Exchange has moved to boost its defences against US rival Nasdaq's hostile takeover bid by bringing forward its third quarter results figures showing strong earnings and revenue growth.

In the statement Clara Furse, LSE chief executive, says the group's trading performance of the last 12 months highlighted the exchange's "increasing operational and strategic value".

The LSE reported revenue of £89.9 million in the third quarter, up from £80.9 million the year before, while operating profit rose to £47.8 million from £37.5 million.

Revenue for the nine months to 31 December 2006 rose 20% to £253.2 million, while operating profit was £129.1 million (2005: £62.6 million) and basic EPS
was 38.7 pence (2005: 20.7 pence per share).

Furse says the "excellent performance" supports the board's rejection of Nasdaq's offer which "significantly undervalues the business and the exchange's unique strategic position".

The LSE earnings statement was released three weeks ahead of schedule and comes two days before the first close of Nasdaq's £12.43 per share offer. The US exchange will find out on Thursday how much backing it has from LSE shareholders for its bid.

Earlier this week Nasdaq issued a circular to LSE shareholders warning them that their investments in the UK market operator could fall substantially if its takeover bid fails.

On Friday the US exchange reiterated that it's £12.43-a-share offer was final and said it that it could sell its stake and set up competitor to LSE in London if its bid is rejected.

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