.jpg)
The Board of London Stock Exchange Group plc (“the Exchange Group”) is today posting its shareholder circular (the “Circular”) in response to the final offer posted by Nasdaq on 12 December 2006*. As stated in the Exchange Group’s announcements on 20 November and 12 December 2006, the Board unanimously rejects Nasdaq’s wholly inadequate offer as it substantially undervalues the Exchange Group and fails to reflect the unique strategic position and the powerful earnings and operational momentum of the business.
The Circular highlights the Exchange Group’s position at the centre of the globalisation of capital markets, the exceptional resilience and quality of the business and its ability to compete successfully in a fertile environment for highly efficient listing and trading platforms.
The Circular includes the Exchange Group’s forecast for adjusted basic earnings per share for the 12 months to 31 December 2006 which is expected to be not less than 50.4 pence per share, an increase of no less than 58 per cent. The Board also announces its intention to recommend a FY 2007 final dividend of not less than 12 pence per share, bringing the total dividend for FY 2007 to at least 18 pence per share, an increase of at least 50 per cent compared to FY 2006.
The Board highlights that Nasdaq’s final offer is the lowest price Nasdaq can currently offer under the Takeover Code. The offer values the Exchange Group at a multiple of 24.7x adjusted basic EPS for the 12 months to 31 December 2006, lower than the multiple of 29.8x adjusted earnings for the 12 months to 31 December 2005 from Nasdaq’s withdrawn proposal in March 2006. Nasdaq’s final offer is also lower than the trading multiple for Euronext N.V. of 30.1x for the 12 months to 31 December 2006.
Consequently, the Board of the Exchange Group strongly recommends that Exchange Group shareholders reject Nasdaq’s wholly inadequate offer and take no action in respect of their shareholdings.
Chris Gibson-Smith, Chairman of the Exchange Group, commented:
“Over the last twelve months, records have tumbled in terms of money raised as well as the volume and value of trading on our markets. This is further confirmation of the significant progress we are making towards the realisation of our vision to be ‘the world’s capital market’. For the second time this year, Nasdaq is offering a wholly inadequate price for the company and shareholders should reject the offer.”
For further information, please contact:
| London Stock Exchange Group plc | |
| John Wallace - Media | +44 (0)20 7797 1222 |
| Paul Froud - Investor Relations | +44 (0)20 7797 3322 |
| Merrill Lynch | +44 (0)20 7628 1000 |
| Matthew Greenburgh | |
| Richard Slimmon | |
| Lehman Brothers | +44 (0) 20 7102 1000 |
| Anthony Fry | |
| Stephen Fox | |
| Finsbury | +44 (0)20 7251 3801 |
| James Murgatroyd | |
| Simon Moyse |
* The offer has been made by Nightingale Acquisition Limited, a wholly owned subsidiary of The Nasdaq Stock Market, Inc. (“Nasdaq”). Nasdaq has defined “final” in its offer document as meaning that its offer will not be revised except: (i) upon the recommendation of London Stock Exchange Group plc Board; or (ii) if a firm intention to make a competing offer for London Stock Exchange Group plc is announced, whether or not subject to preconditions.
A conference call for analysts will take place at 10:00 GMT today, Tuesday 19 December. Dial-in details and slides for the call will be available on the Exchange Group’s website from 08:30 GMT this morning: http://www.londonstockexchange-ir.com/lse/bid/
A replay of the conference call will be available on the Exchange Group’s website later this morning.
A copy of the Exchange Group’s Circular responding to Nasdaq’s offer is available on: http://www.londonstockexchange-ir.com/lse/bid/
Sources and bases:
- The Exchange Group multiple of 24.7x is calculated as Nasdaq’s offer price of 1,243 pence per ordinary share divided by the Exchange Group’s forecast adjusted basic earnings per share for the 12 months ended 31 December 2006. The 29.8x multiple offered in Nasdaq’s withdrawn proposal is sourced from the Nasdaq press release of 10 March 2006- The Euronext N.V. multiple of 30.1x is calculated using the 12 months ended 31 December 2006 earnings per share estimates as sourced from Reuters and the share price as at 15 December 2006 (being the latest practicable date prior to posting of the Circular)
The Directors of the Exchange Group accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors of the Exchange Group (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
PricewaterhouseCoopers LLP, Merrill Lynch International and Lehman Brothers Europe Limited have each given and not withdrawn their consent to the inclusion of their respective reports in this announcement.
Merrill Lynch International, which is regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Exchange Group and no-one else in connection with the offer and will not be responsible to anyone other than the Exchange Group for providing the protections afforded to clients of Merrill Lynch International nor for providing advice in relation to the offer.
Lehman Brothers Europe Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Exchange Group and no-one else in connection with the offer and will not be responsible to anyone other than the Exchange Group for providing the protections afforded to clients of Lehman Brothers Europe Limited nor for providing advice in relation to the offer.
View the full Press Release in PDF format (opens in a new window)
