Newspaper article The Evening Standard (London, England)

Macquarie Loses Grip on [Pounds Sterling]1.8bn LSE Takeover Plan; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Macquarie Loses Grip on [Pounds Sterling]1.8bn LSE Takeover Plan; MARKET REPORT

Article excerpt


PSSST! Don't look now but the London Stock Exchange is slipping through the fingers of that jolly band of investors which have teamed up with Macquarie Bank to bid for one of the Square Mile's oldest institutions.

Yesterday shares in the LSE were lifted yet higher to trade above 700p for the first time with a rise of 21p to 711p. It looks like its going to take more than a few "tinnies" to get this party going for the swashbuckling Aussies who are looking to gain control of the best stock market in the world.

Their audacious offer of 580p a share has lost its credibility and now Macquarie and its partners must decide whether to raise the stakes, or scuttle off with their tails between their legs. If Macquarie does increase the terms to match the share price, it must find an extra [pounds sterling]300 million, stretching the value of the LSE to almost [pounds sterling]1.8 billion.

Discussing takeover terms with Euronext, or Deutsche Borse seemed acceptable but discussing a takeover with the upstart Aussie bank - formed just a year before Big Bang in 1986 - goes beyond the pale.

The LSE has published its defence document, which points to a robust performance during the past couple of quarters and the prospect of future growth - not bad for a company that has been in the business of share trading for more than 300 years.

The first offer date for the Macquarie bid is 31 January, which means it is likely to decide soon if it intends to make a higher bid, or get out while the going is good.

Whatever the outcome, it is unlikely future bidders for the LSE will be able to offer less than 700p a share.

There was a two-way pull among miners yesterday. Dresdner Kleinwort Wasserstein has buy ratings on all the leading shares and has been lifting its target prices.

Antofagasta goes from 1725p to 2200p, Lonmin from 1320p to 2050p, Xstrata from 1750p to 1850p, Rio Tinto from 2750p to 3300p and Anglo American from 2000p to 2300p.

By contrast, Investec Securities says there is now considerable downside risk to such shares after the sector's strong performance last year. …

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