The London Stock Exchange has said it plans to return as much as 380 million euros to investors to try to persuade them to reject a hostile takeover bid from US rival Nasdaq. Nasdaq already owns almost 30% of the LSE, while so-called hedge funds – which manage investments for private investors – now hold the balance of power.
HSBC analyst Joanna Tierney said: “It’s estimated they (the hedge funds) control 30% to 40% of the LSE shares, either through derivatives or owning the shares. So really the dialogue is now open between Nasdaq and those shareholders. Nasdaq really needs to persuade them that this 1,243 pence a share level is full and fair; particularly as the nature of the whole industry is changing, with more and more competitors coming in and more and more fragmentation.”
The LSE has until Friday to announce its full defence and Nasdaq then has until 27 January to make final changes to its offer.
Analysts are divided over whether the LSE will succumb to Nasdaq’s existing bid. LSE shares are trading well above the current offer, signalling that some investors expect improved terms.