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.
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.