The Board of the London Stock Exchange Group plc yesterday published its formal rejection of Nasdaq’s final order. The Board rejected the offer because its members felt it substantially undervalued the Exchange.
“The transatlantic deal between the New York Stock Exchange and Euronext has meant that Nasdaq is under pressure to follow suit with another transatlantic manoeuvre,” says David Easthope, an analyst at Celent, the Boston-based financial research and consulting firm.
“The merger of Nasdaq and LSE is an appropriate pairing, however I can see the price of this deal rising into the stratosphere,” he says. The LSE’s share price is now so high that it is hard not to be optimistic about the exchange’s future prospects, according to Easthope. “While this speculation must be good for LSE shareholders, the synergies from a potential merger are likely to take a long time to materialise,” he notes. “Are the remaining shareholders really considering whether the merger is beneficial to LSE’s future prospects, or merely looking at short-term profit opportunities? It is probably the latter, which may not bode well for LSE,” he continues.