Keeping The Plague Out

NASDAQ is playing dirty pool at the London Stock Exchange, and Brown’s government may want to take away it’s cue.

Nasdaq, the US exchange with a 30 per cent stake in the London Stock Exchange, on Wednesday blocked a proposal at the LSE’s annual meeting that would have allowed the London bourse to issue roughly enough new shares to buy Borsa Italiana, as it proposed to do last month.

Nasdaq launched a failed, hostile bid for the LSE late last year that the London exchange’s own management refused even to consider on the grounds that it so undervalued the company it was not worth discussing.

Actually, the LSE rejected NASDAQ because the world’s investment community sees it as infected by the US tort law bar and Sarbanes-Oxley, which have together destroyed NASDAQ’s IPO business.

Anyway, NASDAQ hopes to force the world to love it, contagion and all:

Nasdaq has never publicly aired its views on the proposed €1.6bn acquisition of Borsa Italiana. Privately, advisers close to the company say it retains an open mind on whether it will support the transaction.

However, the vote against the resolutions appears to be part of a delicate manoeuvring by the company to edge itself into talks with the LSE’s management.

Bob Greifeld, Nasdaq’s chief executive, has formally requested a meeting with Clara Furse, his LSE counterpart, to discuss the merits of the Borsa transaction.

Ms Furse on Wednesday dismissed as “nonsense” any suggestion that the merger was intended to act as a poison pill against any future bid attempts by the US exchange. A tie-up with Borsa Italiana would dilute Nasdaq’s holding to about 22 per cent.

The LSE will post a circular to shareholders about the Borsa Italiana transaction this month and hold a special meeting to approve it in the first half of August.

“We believe we will have more than sufficient shareholder support for this proposition,” Ms Furse said, adding that she expected the deal to be completed by October.

My money is on the LSE to put NASDAQ back into quarantine – the UK’s prosperity depends on keeping the US plague out of London’s financial markets.

Prime Minister Brown knows that too, so let’s hope he gives the LSE a helping hand.

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3 Responses to Keeping The Plague Out

  1. Jay says:

    OT but thought you might find this interesting, it’s external debt per dollar of GDP:

    http://www.nationmaster.com/graph/eco_deb_ext_pergdp-economy-debt-external-per-gdp

    (wow, the UK is $3.87 owed per dollar of GDP)

  2. gandalf says:

    Jay

    I think it’s the other way round – the UK owes $3.87 per dollar of GDP! The definition says:

    total public and private debt owed to non-residents repayable in foreign currency, goods, or services. Per $ GDP figures expressed per 1 $ gross domestic product.

    The Swiss & Hong Kong are almost as bad.

    I think this reflects banking nations (for the UK, Hong Kong & Switzerland at least) – if you have lots of Russian/Arab cash, that counts as debt.

    Shows how these nations are exposed to globalization though.

  3. Jay says:

    That’s the way I meant it but worded it badly. maybe I should’ve put $3.87-owed or put those two parts in quotes. Or, I could’ve just written what you did.

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