Mar 28, 2006 11:36 am US/Eastern
London Exchange Expects 'Excellent' Year
LONDON (AP) ―
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London Stock Exchange (File)
AP
The London Stock Exchange PLC, which is being targeted for takeover by the Nasdaq, said Tuesday it is on track for "excellent" annual results as it unveiled a sharp rise in trading volumes in the current financial year.
The LSE said the average daily number of trades on its SETS electronic platform stood at 216,000 in the 11 months to Feb. 28 — a 29 percent jump from the same period last year.
The bourse added that SETS trading volumes had accelerated further since January, with average daily trades up 38 percent on the year at 272,000. SETS, which is the LSE's trading service for FTSE 100 securities and the most liquid FTSE 250 securities, is a key driver of revenue for the exchange.
"The strong performance of the first nine months of the financial year has improved further still in the last quarter and, as expected, we are on track to deliver an excellent outcome for the current financial year," Chief Executive Clara Furse said.
Analysts said the LSE's focus on the record levels of value and volume traded on SETS is partly aimed at prodding the New York-based Nasdaq Stock Market Inc. into raising its preliminary offer of 2.4 billion pounds ($4.2 billion) for the London exchange.
"We believe that the message from this statement to Nasdaq is that it (Nasdaq) needs to up its 950 pence-a-share bid in order to succeed," analyst Mamoun Tazi at Man Securities Ltd. said.
LSE shares fell 0.8 percent on Tuesday, but at 1,118.5 pence ($19.59) remained well above the Nasdaq offer price.
Filings to the exchange show that some large institutional shareholders have been increasing their stake in the bourse in recent days, while others have been reducing their holdings.
"With LSE shares up 40.9 percent over the last 30 days, there's bound to be some profit-taking, but given that the shares are now materially above the 950 pence a share indicative bid from Nasdaq, there's clearly the expectation of a higher price being paid," said Katrina Preston at brokerage Bridgewell Securities.
Rejecting the Nasdaq approach earlier this month, the LSE claimed — as it has with previous offers from Deutsche Boerse AG and Macquarie Bank Ltd. — that the offer undervalued the exchange.
Australia's Macquarie, which was forced to drop its 580 pence ($10.01) per share offer last month after receiving acceptances representing just 0.4 percent of the exchange, consistently argued that the LSE's share price had become inflated because of the takeover interest swirling around it.
The LSE was also in the sights of pan-European exchange Euronext NV and Germany's Deutsche Boerse, which called off a 1.35 billion pound approach in late 2004 and unhappy shareholders forced the resignation of its chief executive.
More recently, Euronext has indicated it may seek a merger with Deutsche Boerse.
(© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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