Swedish firm OM Gruppen raised its hostile bid for the London Stock Exchange yesterday by up to 26 per cent, but Europe's biggest bourse said the improved offer was still inadequate.
The revised offer gives LSE shareholders a choice between a higher all-share bid and a mix of cash and shares to value the London exchange at between £961 million sterling (€1.64 billion) and £1.02 billion sterling based on yesterday's closing prices, easily above its market capitalisation of £834 million. "The board believes that OM's revised offer continues to represent inadequate value for shareholders and offers no proven benefits for customers," the LSE said in a statement.
OM, which operates the Stockholm bourse, initially offered LSE shareholders a package valuing the LSE at £808 million sterling when it launched the hostile bid at the end of August.
The new offer is either 1.4 new OM shares for each LSE share, or £20 sterling in cash plus 0.5 new OM shares, which would make £32.25 in total.
Under British takeover bid rules, the exchange now has until October 20th to publish its expected third and final defence document rejecting the bid.
"The offer is the consequence of listening to LSE shareholders," OM's chief executive Mr Per Larsson said. The hostile bid is part of a Europe-wide battle to create a deep, pan-European market for blue chips and growth stocks and exploit the anticipated huge surge in equity trading as the region catches America's stock market bug.
The new Swedish offer was expected after OM won backing for its first bid from just 1 per cent of LSE shareholders.
But sources close to UBS Warburg, the LSE's biggest shareholder with a 3.84 per cent stake, said the investment bank would not back OM's higher bid and that Euronext, the new combination of the Paris, Brussels and Amsterdam bourses, would be an attractive partner for London.
Instead shareholders have said they want the LSE to appoint a chief executive and sort out a new strategy before embarking on mergers or alliances.
