Nasdaq Makes $5.3 B Hostile Bid for LSE

Elena
12 Dec, 2006
New York City

Nasdaq Stock Market made a 2.7 billion-pound ($5.3 billion) hostile bid for the London Stock Exchange after failed attempts to persuade the LSE

[R]8:00AM Nasdaq launched a $5.3 billion hostile bid.[/R]
Nasdaq Stock Market ((NDAQ)) made a 2.7 billion-pound ($5.3 billion) hostile bid for the London Stock Exchange after failed attempts to persuade the LSE’s board of directors to back a deal. Nasdaq offered 1,243 pence a share for the U.K. exchange, the same terms that it announced in November. Nasdaq also confirmed that it will not raise that price unless the LSE''s board accepts a friendly approach or another bidder emerges. The U.S. exchange plans to tap a group of leading banks for $5.03 billion in financing, and will also issue $778 million in equity to help pay for the bid.

Nasdaq, an owner of almost 30% of the U.K. exchange, is appealing directly to the shareholders and the U.S exchange said investors will have to accept the offer until Jan. 11. Nasdaq said in a Form 8-K filing with the SEC that the considerable debt it will take on to finance the deal could limit its financial flexibility. Shares in the LSE slipped 0.2% at 1,317 pence in early London trading, but remained above the offer price on expectations the U.K. exchange''s board could accept a higher bid.

In addition, Nasdaq announced plans to raise fees for companies listing their shares in the U.S., although it also promised to hold trading fees flat if it succeeds in accomplishing the buyout deal with the LSE.


[R]7:30AM Japan advances for second day in a row Tuesday, other markets fall.[/R]
Asian markets finished mixed. In Japan, the Nikkei 225 Index gained 0.7% to end at 16,637.78. Exporters Honda added 1.5% and Sony put up 2.1%. Toyota also advanced 1.12% while Canon shares moved 0.31% higher. Stocks in fishery and agriculture sectors also surged on a welcomed merger plan by two seafood makers in Japan. Maruha Group and Nichiro stated Monday they intend to merge their operations through a stock swap in October 2007. Maruha surged 6.4%, as Nichiro soared 14%.

The Hang Seng Index retreated 0.1% to 18,907.33. Among decliners were China Merchants slipping 4% and shoemaker Yue Yuen falling 2%. Airline Cathay Pacific shed 2% while China Resources gained 3.2%. HSBC inched higher 0.5% and Hang Seng Bank closed unchanged.

In Seoul, LG.Philips LCD and Samsung Electronics weighed the market lower. The Korea Composite Stock Price Index, or Kospi, shed 1% to 13,76.98. Liquid-crystal-display marker LG.Philips LCD finished down 4.3% on news of investigations of the LCD maker for fixing prices. Samsung Electronics also closed lower, declining 0.7%.

Around the region Australia S&P/ASX 200 gained 0.07% to end at 5,473.60, New Zealand NZSX-50 ended higher 1% at 3,298.11. Taipei Weighted index lost 2% to 7,458.56 while the Singapore Straits Times index advanced 0.23% to 2,893.81. The Shanghai Composite index added 1.8% to 2,218.95.


[R]6:30AM European markets moved slightly higher on Tuesday on retailers.[/R]
European markets were higher on Tuesday. By mid morning, the FTSE 100 in London was down 0.2% at 6,147.2, while Frankfurt Xetra Dax gained 0.1% to 6,477.19, and the CAC 40 in Paris was flat at 5,428.25.

Advancers

Metro, continued its upward movement as investors expect big sales at its two main consumer electronics stores before the government imposes higher sales tax next year. Metro shares gained 1.2%.

Ahold, the Dutch food retailer, advanced 2% after the former chief financial officer of its US Foodservice unit was given a three years probation for his role in the accounting fraud.

Tesco advanced 1.8% following its statement it was buying out the 50% it does not already own in Hymall, a China-based supermarket chain. Carrefour, also owning supermarkets in China, added 1.9%.

Remy Cointreau, up 4.61%, hit a ten years high after its statement that its first-half comparable champagne profit soared 49% on increased Piper-Heidsieck prices, volumes and improved product.

Umicore, based in Belgium, surged 5.9% on its agreement to combine its zinc smelting assets with Zinifex of Australia in a deal that would create the largest zinc maker in the world.

Decliners

Oil groups sank after crude declined more than 1% overnight on the NYME. Total, the French group, shed 0.9%, BP in Britain lost 1.3% and Austrian OMV was off 0.4%.

Deutsche Börse was 1% down after WestLB reduced its rating from add to hold. Philips Electronics moved down 0.6% after its LG.Philips LCD joint venture in South Korea lost almost 8% in the wake of investigations into price fixing.

Oil and gold

Crude oil gained on rumors that the OPEC, may agree to reduce output this week to stabilize prices. Crude oil for January delivery added 34 cents, or 0.6%, to $61.56 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil for January settlement was 19 cents higher to $62.03 a barrel on the ICE Futures exchange in London. Gold for immediate delivery gained $0.70, or 0.1%, to $631.15 an ounce.

Currencies

The euro bought $1.3237 in morning European trading, slightly lower than the $1.3251 it bought in New York late Monday. On Tuesday, the British pound moved upward to $1.9599 from $1.9587. The dollar slipped Tuesday against the Japanese yen, buying 116.82 yen, down from 116.88 yen on Monday.