The Nasdaq Stock Market’s failure to take over the London Stock Exchange with a $5.3 billion hostile bid leaves it dangerously leveraged and in need of clear strategy to keep up with the other major exchanges, according to one LSE shareholder.
“I think Nasdaq is struggling. They are very heavily borrowed to finance this deal and they’re losing market share in their home market,” Keith Loudon, senior partner at Redmayne-Bentley, told “Worldwide Exchange.” “Nasdaq were looking for something on the cheap, they needed the LSE much more than the LSE needed them.”
Redmayne-Bentley Stockbrokers holds LSE shares and rejected the Nasdaq's offer.
Loudon said that the future of stock markets lies more with alliances than acquisitions.
“The working together of the Tokyo Exchange and the New York Stock Exchange and the London Stock Exchange, plus perhaps others, is a good foundation for the future I believe,” he said.
Loudon also points out that the NYSE has protection against takeovers as no investor can hold more than 5% of the company’s votes.