Clara Furse, chief executive of the London Stock Exchange (LSE), yesterday moved to deny the exchange was for sale. The denial comes amid mounting speculation that Nasdaq was planning an offer to acquire the London-based share market.
The story excited speculative interest in the LSE's shares, which at one stage reached a record high of £4.79.
Despite being the largest exchange in Europe and ranking third in the world, the LSE has experienced difficulties in establishing its own position during a wave of recent mergers among the European bourse.
Having failed in its own bid to acquire the Liffe derivatives marketplace, the LSE has looked increasingly isolated. Euronext, which scooped Liffe away from the LSE, has emerged as a significant force in Europe having consolidated the exchanges in Paris, Amsterdam, Brussels and Lisbon.
Two years ago the other major player in Europe, Germany's Deutsche Boerse, also held its own abortive discussions about a merger with the LSE. Amid the uncertainty this generated other interested parties, namely Sweden's OM Group, were subsequently flushed out. In this instance, the LSE was able to resist OM Group's unwanted takeover proposal. However the LSE's recent chequered history of unsuccessful proposals of merger and acquisition doesn't inspire confidence that, in the long term, it will be able to retain its strong position in the global markets as an independent player.
While the Nasdaq connection has some commercial logic, the question of the degree of integration possible between the two technology platforms has not been answered. While a bid may make sense for the Wall Street based exchange, yesterday's speculation has sent the value of the LSE to around £1.3 billion. At these levels, any corporate announcement by either Nasdaq or the LSE might purely open the door for other competitive bidders with deeper pockets.