Macquarie Bank Abandons $2.6 Billion London Stock Exchange Takeover Bid

Strategic Insights -

Macquarie Bank Ltd has pulled out of its $2.6 billion takeover bid for the 300-year-old London Stock Exchange (LSE), citing strong resistance from the LSE board and its shareholders. The Australian investment bank had made a 580 pence ($A13.72) per share offer, but after speaking to key LSE shareholders, it believes an increased offer on acceptable terms would unlikely be accepted. The decision is seen as a positive move by investors, with Macquarie's shares rising $2.70 or 4.5 per cent to $62.37. Despite this, Macquarie will continue to look for acquisitions in Europe, with its European head, Jim Craig, stating that the region is a key growth area for the bank.

Key Takeaways:

  • Macquarie Bank Ltd has abandoned its $2.6 billion takeover bid for the London Stock Exchange (LSE) due to strong resistance from the LSE board and its shareholders.
  • The bid, which was made in December, offered 580 pence ($A13.72) per share and expired on February 28.
  • Macquarie had spoken to key LSE shareholders and believed an increased offer on acceptable terms would unlikely be accepted.
  • The decision to pull out of the bid is seen as positive by investors, with Macquarie's shares rising $2.70 or 4.5 per cent to $62.37.
  • Macquarie will continue to look for acquisitions in Europe, with a focus on key growth areas.
  • The bank's European head, Jim Craig, stated that the region is a key growth area for Macquarie.
  • The LSE's largest shareholder, Threadneedle Asset Management, signalled its intention to oppose the bid, increasing its 12 per cent stake by a further 300,000 shares bought at 615 pence.
  • Fellow stock exchange operators Deutsche Boerse and Euronext may still be interested in the LSE after gaining conditional approval from the UK competition regulator.
  • Shaw Stockbroking banking analyst David McDonald stated that Macquarie has done the right thing by pulling out of the bid, citing concerns over the prices Macquarie had paid for other assets.

Statistics:

  • $2.6 billion: Value of Macquarie's takeover bid for the London Stock Exchange (LSE)
  • $A13.72: Price offered by Macquarie per share
  • 580 pence: Price offered by Macquarie per share in sterling
  • 300-year-old: Age of the London Stock Exchange (LSE)
  • 4.5 per cent: Increase in Macquarie's shares to $62.37
  • 12 per cent: Stake held by Threadneedle Asset Management in the LSE
  • 300,000: Number of additional shares bought by Threadneedle Asset Management to oppose the bid
  • 615 pence: Price paid by Threadneedle Asset Management for additional shares

Sources:

  • Macquarie Bank Ltd
  • London Stock Exchange (LSE)
  • Threadneedle Asset Management
  • Deutsche Boerse
  • Euronext
  • Shaw Stockbroking
  • Asia Pulse
  • ASX: MBL