GO
Loading...

Enter multiple symbols separated by commas

Nasdaq Seeks to Sell LSE Stake, Focuses on OMX

Nasdaq is abandoning its 797 million pound ($1.58 billion) stake in the London Stock Exchange, five months after its takeover bid failed, as it focuses on buying Nordic exchange operator OMX.

Nasdaq, which needs overseas acquisitions to gain an international foothold, is locked in a $4 billion bidding war with Borse Dubai to take over Nordic exchange OMX, which owns exchanges in Sweden, Denmark, Finland, Iceland and the Baltic states.

"In the absence of either an OMX or a London Stock Exchange acquisition, international opportunities will be limited - enough potentially to turn Nasdaq into the target," FBR analyst Matt Snowling said.

UBS and JPMorgan are helping Nasdaq decide what to do with the 61.3 million LSE shares, which are valued at about 797 million pounds at current prices.

Nasdaq said on Monday it wants to sell its LSE shares, but could not guarantee that it would.

New York-based Nasdaq, which bought its shares of the LSE over time at an average of about 11 pounds apiece, could amass a paper profit of $245.2 million at current level.

LSE shares were up 2.1% at 1,296 pence each at 1035 GMT. Nasdaq shares closed at $31.75 on Friday.

Nasdaq estimated the LSE stake sale would boost its stand-alone 2008 earnings per share by about 30 cents to 35 cents each.

That would lift Nasdaq's 2008 earnings per share to between $2.00 and $2.05, according to Reuters Estimates, and would lower its price-to-earnings multiple to just 15.8 times from 18.7 times, versus 20 times for its peers.

Nasdaq said it would use $1 billion of proceeds from any sale to retire senior term debt and intends to use the reminder to buy back shares.

LSE officials declined to comment.

Since Nasdaq's takeover for the LSE failed earlier this year, the LSE has agreed to acquire Milan exchange Borsa Italiana for 1.6 billion pounds ($3.16 billion), a deal set to dilute Nasdaq's stake to about 22%.

Borse Dubai's offer for OMX represents a 13% premium to Nasdaq's offer of 0.502 shares of Nasdaq shares plus 94.3 crowns in cash for each OMX share.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Learning your value

    How to make sure you get what you¿re worth at your job, why you should stop apologizing, and how to manage work-life balance. Anchor Mika Brzeznski, author of the new book "Grow Your Value," shares her strategies for juggling busy lives.

  • Why women cheat?

    Is cheating bad? Why do women cheat? The founder and CEO of affair website Ashley Madison tells all, including why he has his eye on China.

  • Judge's gavel

    The Financial Industry Regulatory Authority disciplined several financial services firms and individuals in May 2015.

U.S. Video

  • Cramer: Here's a sign the market could rally

    Wall Street's been soaking in red, but "Mad Money" host Jim Cramer has one signal to watch for that could point to another run.

  • Burger war maneuvers

    Cramer looks at the number of company's selling burgers and tries to determine the quality names, as well as those to avoid.

  • Cramer: What's driving defense?

    Cramer says that even though President Obama has made it clear the US can no longer be the world's policeman, the country can become the world's arms dealer. Profiting from defense spending.