Nasdaq’s done playing games

Amy Scott Jan 26, 2007

KAI RYSSDAL: The Nasdaq is done playing business games. Officials said today they’ll pay $5.3 billion to buy the London Stock Exchange. Not a penny more. Not a penny less. The LSE’s been fighting off the hostile bid tooth and nail. But Marketplace’s Amy Scott reports it’s the shareholders who’ll ultimately decide.

AMY SCOTT: Shareholders had until tomorrow afternoon to accept Nasdaq’s offer. But today the company extended that deadline to early next month. The London Stock Exchange insists it’s worth far more than the $5.3 billion Nasdaq is offering. But analyst Brad Bailey with Aite Group says new regulations and competition in Europe could soon drain some of the LSE’s business and its value. He says Nasdaq knows it.

BRAD BAILEY: It could definitely be posturing, but it seems they’re pretty set on keeping their offer here.

If the deal doesn’t go through analysts expect Nasdaq to seek another European partner. Nasdaq’s archrival, the New York Stock Exchange, is well on its way to a merger with Paris-based Euronext. They’ve already announced stakes in the Tokyo and Indian Stock Exchanges. Adam Sussman with the Tabb Group says Nasdaq has to go where the customers are. And that is around the globe.

ADAM SUSSMAN: The more delayed that this deal becomes, the further back it puts both exchanges in terms of pursuing a global mandate.

If shareholders do approve the merger, Sussman says the bitter negotiations might turn out to be the easy part. There are the cultural obstacles — even the mayor of London has spoken out against the deal. And Sussman doubts British regulators will make it easy.

In New York, I’m Amy Scott for Marketplace.

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