ElCapitalista007

martes, agosto 28, 2007

Nasdaq may find LSE stake sale tough, but worth it

BY Reuters.-It won't be easy for Nasdaq Stock Market Inc to sell its 31 percent stake in London Stock Exchange Plc, but a sale could still happen and could even generate a profit for the U.S. exchange.Nasdaq said last week it was looking to sell its stake in the British exchange and focus instead on buying Nordic exchange operator OMX.Selling the LSE shares might be difficult, analysts said, because most buyers would prefer to own it outright instead of holding a minority stake.
But the LSE has shown a willingness to combine with other exchanges, as when it agreed in June to buy Milan's Borsa Italiana for 1.6 billion pounds ($3.2 billion).

"No doubt LSE management would rather remain independent and are not up for sale, but there is a price tag," said Piper Jaffray analyst Joshua Elving. "Perhaps there is another suitor the LSE prefers to partner with that's not Nasdaq."

So far, a series of possible bidders have been contacted or requested information on the shares, including NYSE Euronext, Australia's ASX Ltd, Singapore's state-owned Temasek Holdings and Italian bank Monte dei Paschi di Siena, sources familiar with the matter said.

Analysts said the LSE may be more responsive to an offer from a brand-name suitor such as NYSE Euronext, which owns the New York Stock Exchange as well as bourses in Paris, Amsterdam, Brussels and Lisbon.

But there are definitely obstacles to a deal being completed, including the European Union's new Markets in Financial Instruments Directive, or MiFID, which should boost competition for the LSE and potentially crimp its profits.

"With MiFID coming in, there's a lot of uncertainty about how it will change the landscape for exchanges," said Cubillas Ding, a London-based analyst for financial research firm Celent.
Plus, with financing costs rising globally, mergers are becoming more expensive and consolidation in the red-hot exchanges sector may slow down, said Michael Holland, principal at private investment firm Holland & Co.

"We'll still have some deals but not with the same ease as in the past," he said.

Nasdaq Chief Executive Robert Greifeld said last week its LSE investment -- after two unsuccessful attempts to buy the UK exchange -- was a "source of constraint" and that Nasdaq's market capitalization did not reflect the LSE stake's value.

He was confident Nasdaq could sell the stake at a premium.

A sale could generate a profit even though Nasdaq may not get the premium it wants. The 61.3 million shares in LSE are valued at about 824 million pounds at Tuesday's closing price.

LSE shares have risen about 3 percent since Nasdaq made its announcement, so even if Nasdaq doesn't get a premium to what the shares are trading at now, it could still make a profit.

"Our assumption is that Nasdaq would sell it at a slight discount to the current market value but still north of their cost base," Piper Jaffray's Elving said.

LSE shares have only continued to rise since Nasdaq built up its stake, and they hit a record high earlier this month.

($1 = 0.50 British pounds)

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