Nasdaq to sell LSE stake

Nasdaq to sell LSE stake

US market operator Nasdaq says it is exploring options to dispose of its 31% stake in the London Stock Exchange (LSE).

Nasdaq is the LSE's largest shareholder and built up its stake following its failed bid to take over the UK exchange.

In today's statement Nasdaq says it believes its current stock price does not adequately reflect the value of its LSE stake and it has retained JPMorgan Securities and UBS Investment Bank to "assist in its review of sale alternatives".

The LSE stake is thought to be worth around $1.56 billion, based on Friday's closing price.

Nasdaq says it will use $1 billion of proceeds from any sale to retire senior term debt and the remainder to repurchase shares. The US exchange expects the sale of the stake to add between 30 and 35 cents to its earnings per share in 2008.

There has been heated speculation around what Nasdaq would do with its LSE stake after it failed to acquire the UK business earlier this year. Since then the LSE has agreed a merger deal with Milan-based Borsa Italiana, which would dilute Nasdaq's stake in the UK business to about 22%.

Nasdaq is also facing a bidding war with Borsa Dubai over control of Nordic and Baltic market operator OMX. The Dubai stock exchange operator launched an unsolicited $3.98 billion bid for OMX on Friday, topping Nasdaq's agreed deal for the Stockholm-based company.

Update

In another statement released on Monday, Nasdaq has clarified that it will not sell LSE shares with more than 30% of the voting rights to any one party.

Nasdaq says the possible disposal of its LSE stake would "would not involve a sale by Nasdaq to any single purchaser (or to persons known to Nasdaq to be acting in concert in connection with the purchase) of an interest in shares carrying 30% or more of the voting rights of LSE".

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