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The Board of The Nasdaq Stock Market, Inc. ("NASDAQ") is pleased to announce that today it is posting a document (the "Response Document") to Shareholders (other than certain Overseas Shareholders) in London Stock Exchange Group plc ("LSE") in response to the circular issued by LSE on 19 December 2006.
As stated in NASDAQ's announcements on 20 November 2006 and 19 December 2006, the NASDAQ Board believes that its Ordinary Offer of 1,243 pence per LSE Ordinary Share is a full and fair price. The Response Document highlights the reasons why LSE Shareholders should accept the Final Offers:- the Ordinary Offer reflects a realistic assessment of standalone value, a full premium for control of 54 per cent to the undisturbed price and a fair share of synergies
- LSE Shareholders should not be misled by a simple emphasis on volume growth without price cuts, a defensive return of capital, or potential initiatives that could promote piecemeal co-operation or minority blocking stakes
- the LSE fails to acknowledge growing customer dissatisfaction, new competitive threats introduced by upcoming regulatory changes, or accelerating consolidation of the exchange landscape
- LSE Shares would be worth far less without NASDAQ, and a lapsing of the Final Offers is likely to precipitate a substantial fall in the share price
- an LSE/NASDAQ combination is good for LSE stakeholders as it will reinforce London's pre-eminence as Europe's premier financial centre and yield benefits to users, issuers and investors
These factors have been recognised by long-term shareholders in LSE, who have voted with their feet and sold their shares.
The imminent announcement of LSE's 2006 financials, which has been anticipated in press speculation, in no way changes the fact that LSE's value case has been entirely based on current and historical financial performance. However, the key issue is how LSE will react to the substantial future challenges that it will face in 2007 and beyond. Our Response Document describes why we believe the LSE is unprepared for those challenges ahead.
Commenting on the Final Offers, NASDAQ President and CEO Robert Greifeld said:
"The Final Offers represent full and fair value to existing LSE Shareholders, and the proposed LSE/NASDAQ combination presents a unique opportunity to create a global, balanced and scalable exchange business. Together with NASDAQ, the LSE will be better positioned to meet new and increasing challenges, including competing initiatives from customers, significant regulatory changes, and the recent wave of consolidation among powerful competitors. The LSE circular presented a weak case to Shareholders and offered no new important information."
LSE Shareholders are urged to accept the Final Offers as you, rather than the LSE Board, will determine whether the Final Offers will be implemented.
To accept the Final Offers in respect of LSE Shares held in certificated form (that is, not through CREST), holders should complete, sign and return the relevant Form(s) of Acceptance in accordance with the instructions thereon and the instructions in the Offer Document as soon as possible and, in any event, so as to be received no later than 3.00 p.m. London time on 11 January 2007.
To accept the Final Offers in respect of LSE Shares held in uncertificated form (that is, through CREST), holders should submit a TTE instruction in accordance with the instructions in the Offer Document for settlement as soon as possible and, in any event, by no later than 3.00 p.m. London time on 11 January 2007.
Copies of the Response Document, the Offer Document and Forms of Acceptance are available for collection (during normal business hours only) from Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom and Greenhill & Co. International LLP at Lansdowne House, 57 Berkeley Square, London W1J 6ER, United Kingdom. The Response Document will also be made available on www.nasdaq.com.
Note: The Final Offers will not be revised except that NAL reserves the right to revise the Final Offers: (i) upon the recommendation of the LSE Board; or (ii) if a firm intention to make a competing offer for LSE is announced, whether or not subject to any preconditions.
Save as defined above, capitalised terms used in this announcement have the same meaning as in the Offer Document dated 12 December 2006.
