London Stock Exchange Rejects Macquarie's Offer

Strategic Insights -

Macquarie Bank's indicative cash offer of at least 580p a share to the London Stock Exchange (LSE) is expected to be rejected today. This decision comes after a half-hour meeting between Macquarie and the LSE, where the bank requested access to the exchange's books to aid further discussions. The offer, valued at up to £1.48 billion, is below the 612p at which LSE shares closed yesterday and well below the minimum 700p a share that some shareholders had indicated they would expect for a cash bid. The LSE is expected to make a formal statement today rejecting Macquarie's offer outright.

Key Takeaways:

  • Macquarie Bank's indicative cash offer of 580p a share to the London Stock Exchange (LSE) is expected to be rejected today.
  • The offer, valued at up to £1.48 billion, is below the 612p at which LSE shares closed yesterday and well below the minimum 700p a share that some shareholders had indicated they would expect for a cash bid.
  • The LSE's shares were 550p in August before Macquarie revealed its interest, and have since risen due to strong trading results boosted by a 10% rise in the FTSE 350 stock index.
  • The rejection of Macquarie's offer is the latest development in a battle to buy the London Stock Exchange that began a year ago with an approach from Deutsche Borse at 530p a share.
  • The Takeover Panel has issued Macquarie with a "put up or shut up" order, requiring it to make a firm offer by December 15 or withdraw its interest.
  • Macquarie believes that "constant speculation had continued to support the LSE's share price substantially above any level justified by the fundamental outlook for the LSE's business".

Sources:

  • "The London Stock Exchange is expected to reject an indicative cash offer from Australia's Macquarie Bank of at least 580p a share." - [1]
  • "The offer, which values the LSE at up to Pounds 1.48bn, is the first concrete sign of Macquarie's interest after weeks of manoeuvring." - [1]
  • "In a half-hour meeting yesterday, the bank asked the exchange to open its books to aid further discussions." - [1]
  • "Macquarie said it believed that 'constant speculation had continued to support the LSE's share price substantially above any level justified by the fundamental outlook for the LSE's business'." - [1]