On Monday, the Nasdaq Stock Market put its 31% stake in the London Stock Exchange up for sale, saying the market isn’t correctly valuing its holdings of the U.K. bourse. Nasdaq originally built up the stake as it sought to buy the LSE, however the bid was rejected by shareholders in February this year.
Nasdaq will now focus on trying to buy Nordic exchange operator OMX. The New York-based exchange is battling Bourse Dubai for OMX, which operates exchanges in Sweden, Denmark, Finland and Iceland and the Baltic nations.
Nasdaq, which holds 31 percent of the London Stock Exchange, says it has hired J.P. Morgan and UBS to explore ways of selling its stake and adds that it will use around $1 billion of proceeds from any sale to pay down senior-term debt and the remainder to repurchase shares. Selling the stake would increase Nasdaq's earnings per share for 2008 by around 30 cents to 35 cents, says the company.
Nasdaq confirms that it will not sell its sake to any single purchaser carrying 30% or more of the voting rights of LSE.
The LSE holding was worth around $1.56 billion at Friday's closing price. LSE shares improved 2 percent to 1,295 pence after the Nasdaq announcement.