The Nasdaq is now cleared to rebid for British rival the London Stock Exchange, although a source familiar with the matter said the US equities exchange isn't in any hurry to pounce.

Nasdaq had a $4.2 billion (€3.3 billion) takeover offer for the LSE rebuffed in March and has since amassed a stake of just over 25 percent in the London mart.

Under British takeover rules, Nasdaq had to wait six months from withdrawing its offer before rebidding - meaning it could only move again in October. As this time has drawn closer, there has been increased speculation about Nasdaq's intentions.

If Nasdaq rebids now, under the takeover rules, it has to pay at least the highest price it spent on acquiring its current stake. But if it waits until early May 2007, it can rebid at a lower price.

"While I believe Nasdaq is prepared for the slightest change in the LSE's unfriendly stance, I believe Nasdaq will move slowly and deliberately so that the floor on the minimum bid is removed," said Richard Repetto, an analyst at Sandler O'Neill in New York, in an e-mailed response to a Reuters request for comment on Sunday.

"This should put pressure on LSE management by shareholders if their stock price drops," he wrote.

In a research note published in September, analyst Patrick Pinschmidt at Merrill Lynch wrote that it "probably pays" for Nasdaq to wait.

If it bids in October, it has to pay at least the highest price it spent on acquiring its current stake, which he wrote at the time was £12.43 a share. Shares of the LSE were down 7 pence at £12.29 yesterday.

The source familiar with the matter added that another advantage of holding tight is that it may encourage LSE shareholders to put pressure on the exchange's management to enter talks with Nasdaq to lock in the price before its obligation to bid high expires.

Mr Pinschmidt wrote at the time that a negotiated deal above £12.43 did not appear to be on Nasdaq's horizon, while a hostile takeover was impractical because of "the delicate regulatory and political nature of exchange consolidation".

Nasdaq chief executive Bob Greifeld has stayed mum on the exchange's intentions, citing UK Takeover Panel rules. - (Reuters)