U.S. stock market group Nasdaq criticised the London Stock Exchange (LSE) on Tuesday for refusing to discuss the prospect of an agreed takeover deal, and said its hostile bid for the British company was fair.
Nasdaq Stock Market Inc, which owns almost 30% of the LSE and is offering 1,243-pence-a-share in cash for the rest, also said the London exchange group's recent trading forecasts were optimistic.
"We are surprised that the LSE board has to this day completely failed to engage with Nasdaq with respect to a recommended transaction," the U.S. group said in a statement.
"In fact, the only meeting that has taken place was a meeting with Nasdaq as a shareholder, rather than as a potential bidder, in May 2006."
Consolidation is picking up among the world's stock exchanges as they come under pressure from customers to offer global services and cut fees. Competition is also becoming more intense, with a group of investment banks planning to create a pan-European equity trading platform this year.
The LSE has long been a takeover target, in part because of its relatively small market capitalisation compared with rivals. Its shares have more than trebled over the past two years as it has received and rejected a string of offers.
Returning 250 Million Pounds to Investors
Last week, the LSE stepped up its campaign to defeat Nasdaq's bid, which values it at 2.7 billion pounds ($5.3 billion), by pledging to return up to 250 million pounds to investors on top of previously announced share buyback schemes.
The LSE also issued a bullish forecast for volume growth on its SETS electronic trading system, saying it expected the average number of trades per day on the platform to leap 180% to 480,000 in its 2008 financial year.
But Nasdaq said on Tuesday that this forecast was ambitious, and the LSE's plans to cut tariffs would offset volume growth.
"We believe yield pressure will mean that even if LSE achieves its ambitious volume forecast, the reduction in yield is likely to depress the rate of LSE's revenue and profit growth," Nasdaq said in its statement.
Jan. 27 - or effectively Jan. 26, the nearest date on which markets are open - is the last day on which Nasdaq can announce any new information on the bid, though it has the option of extending the final date for acceptances again to Feb. 10.
Analysts are divided over whether the LSE will succumb to Nasdaq's existing bid. Its shares are trading well above the current offer, signalling that some investors expect improved terms, and U.S. investor Samuel Heyman has built up a stake of over 10%, some of it above the Nasdaq offer price.
At 0820 GMT, LSE shares were down 1.2% at 1,300 pence.