The London Stock Exchange (LSE) has won the backing of three of its largest shareholders for its proposed merger with Milan-based Borsa Italiana, a week before its EGM to vote on the deal.
Kinetics Asset Management and Horizon Asset Management, which are both based in New York, have released a statement saying they both back the LSE's merger with the Italian stock exchange operator.
"Kinetics and Horizon intends to vote all the shares of London Stock Exchange held by both organisations in favour of the acquisition," says the statement.
Meanwhile, according to press reports, US hedge fund Paulson & Co, which holds a 9.2% stake in the UK market operator, has also said it will vote in favour of the proposed merger.
LSE shareholders are set to vote on the proposed merger at an extraordinary general meeting (EGM) to be held next Wednesday.
But Nasdaq, which is the LSE's largest shareholder with a 30% stake, still hasn't disclosed which way it will vote.
Market analysts have speculated that the US exchange - which failed to takeover the LSE last year - may move to block the deal. Any merger involving the LSE would dilute Nasdaq's stake in the business and make it too difficult for the US exchange to bid for the LSE in the future. Under UK regulations Nasdaq can't re-launch a takeover offer for the LSE until February 2008.
However Nasdaq has already voted against LSE resolutions that would have allowed the UK exchange to issue more new shares.