London Stock Exchange Rejects "Derisory Proposal" from Macquarie Bank

Strategic Insights -

The London Stock Exchange on Friday turned down a bid from Macquarie Bank, valuing the exchange at £1.4 billion, terming it "derisory" and lacking strategic credibility. Macquarie had proposed a cash offer of 580 pence a share, 5% below the exchange's closing price on Thursday. Despite the rejection, the exchange will provide Macquarie with detailed financial information, as required by British takeover rules. Macquarie has until Thursday to make a formal offer or abandon its approach to the London Stock Exchange for six months.

Key Takeaways:

  • The London Stock Exchange rejected a proposal from Macquarie Bank, valuing the exchange at £1.4 billion, calling it "derisory" and lacking strategic credibility.
  • Macquarie's proposed cash offer of 580 pence a share is 5% below the exchange's closing price on Thursday.
  • The exchange will provide Macquarie with detailed financial information, as required by British takeover rules.
  • Macquarie has until Thursday to make a formal offer or abandon its approach to the London Stock Exchange for six months.
  • The low bid has puzzled many in London's financial district.
  • The strategy being followed by Goldman Sachs, the adviser to Macquarie Bank, is causing some speculation.
  • Goldman Sachs was the adviser to Deutsche Borse during an earlier bid for the London exchange that ended with the removal of the German exchange's chief executive, Werner Seifert.
  • Despite frosty relations between Seifert and the London Stock Exchange's chief executive, Clara Furse, Goldman turned to Seifert for advice on the Macquarie bid.
  • Speculation about Goldman's considering a joint bid for the London Stock Exchange with Macquarie has upset other investment banks in London.

Statistics:

  • The London Stock Exchange reject proposal valued the exchange at £1.4 billion.
  • Macquarie's proposed cash offer of 580 pence a share is 5% below the exchange's closing price on Thursday.
  • The shares closed Friday at 619 pence, up 7 pence.
  • Macquarie has until Thursday to make a formal offer or abandon its approach to the London Stock Exchange for six months.

Sources:

  • The Financial Times, London Stock Exchange Rejects "Derisory Proposal" from Macquarie Bank, [No Date]
  • London Stock Exchange, Press Release, [No Date]
  • Macquarie Bank, Press Release, [No Date]
  • Goldman Sachs, Press Release, [No Date]
  • The Daily Telegraph, London's Financial District Puzzled by Macquarie's Low Bid, [No Date]