The London Stock Exchange (LSE) said yesterday that it was seeking discussions with other stock exchanges.

The exchange's admission came after Nasdaq, the US stock market, acquired a 14.99 per cent stake in the LSE late on Tuesday.

The LSE and Nasdaq are understood to have a meeting arranged for next week. However, the LSE is understood to have had discussions with Nasdaq's larger rival, the NYSE Group, shortly after Nasdaq acquired its stake.

Significantly, most of that stakeholding came from Threadneedle Investment, the UK money manager that has been the LSE's most steadfast backer as it saw off a procession of potential bidders over the past 17 months.

Shares in the LSE jumped more than 15 per cent yesterday to £11.98 (€17.30), with more than 22 million shares changing hands.

But in its statement, which was issued after the close of London trading, the LSE was eager to signal that the battle for control of Europe's largest cash equities market was far from over.

As well as pointing to recent strong trading gains, the LSE said: "Furthermore, the board is exploring the options available to it to create additional value for shareholders and customers,including discussions with other major exchanges."

The exchange added: "The board believes that the current share price does not fully reflect the shift in its growth prospects."

Although the LSE's preferred partner is Euronext, the Paris-based exchange, some of that company's own shareholders are pressing it to merge with Deutsche Börse.

However, Euronext's management - who are unhappy with some of the key terms of the Börse's proposal - are also understood to have contacted the NYSE about a possible deal.

Shares in both Deutsche Börse and Euronext rose yesterday as investors took the view that Nasdaq's move on the LSE left the continental exchanges with little option but to focus on a merger between themselves.

Euronext is said to be coming under strong pressure from French politicians who fear that unless a European exchange champion is created through a merger of the region's two largest businesses, a US rival will enter the market and bring Europe's capital markets under control from across the Atlantic.

In addition, Euronext is understood to have concerns about how its own shares will be valued in what is planned as an all-paper, nil-premium bid. - (Financial Times service)