The LSE board has rejected the £2.7bn offer made by the American company, the third which it has made this year.
In a statement the LSE said: “As stated in the Exchange’s announcement on 20 November 2006, the Board unanimously rejects Nasdaq’s offer as it substantially undervalues the Exchange and fails to reflect its unique strategic position and the powerful earnings and operational momentum of the business.
“The Board will be writing to shareholders to explain its reasons for rejecting Nasdaq’s offer.
“In the meantime, shareholders are strongly recommended to take no action in respect of Nasdaq’s offer.”
However, the New York-based market is appealing directly to shareholders in its attempt to gain control of the LSE.
Nasdaq, which already owns 28.75% of the LSE, says that it requires just 21.75% more to take it to the crucial point of 50% plus one share.
According to the Financial Times, the Nasdaq has set January 11 as the first closing date for its offer, although this could be extended to February 10.
However, LSE shares have been trading today above the Nasdaq`s offer price, an indication investors think the latest offer is too low and that a higher bid will be forthcoming.
LSE has rejected two offers from Nasdaq this year and some observers say the offer is calculated to provoke LSE stockholder pressure on the board to talk with Nasdaq about a merger.
The LSE has 14 days to respond to the latest offer, which Nasdaq can extend to Feb. 10.
© Crimson Business Ltd. 2006
