Offer Rejection

London Stock Exchange Group PLC
18 January 2007


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA OR CANADA

Shareholder Circular


18 January 2007


The Board of London Stock Exchange Group plc ('the Exchange Group') is posting
today its second shareholder circular (the 'Circular') in response to the final*
offer posted by Nasdaq on 12 December 2006.

The Circular highlights the excellent prospects of the Exchange Group which are
underpinned by its global leadership position for listings, the continuing
structural shift to higher volumes of trading driven by declining transaction
costs, increasingly fast and efficient technology and the growing demand for
data products.

The Circular includes the Exchange's SETS forecast for financial year 2008 of at
least 480,000 average trades per day, an increase of at least 180 per cent.  As
evidence of the Board's confidence in the Exchange Group's growth prospects, the
Board also announces an increase of up to £250 million in its existing share
buyback programme, underlining its commitment to continue its proactive approach
to capital management. Over the last two and a half years, the Exchange Group
has returned or announced a commitment to return up to £974 million, 35 per cent
of its current market capitalisation.

Furthermore, the Circular illustrates the Exchange Group's long culture of
competing successfully for liquidity against a number of trading platforms in
the UK and, with MiFID, the opportunity for the Exchange Group to extend its
successful franchise in an increasingly pan-European market.

The Circular sets out the Board's continuing view that the Exchange Group should
be valued against a much broader group of global exchanges which is supported by
financial experts in recent precedent exchange transactions.  Nasdaq's offer of
24.4x is far below the trading P/E multiples for the 12 months to 31 December
2006 of virtually all other major listed exchanges.

The Board of the Exchange Group continues to recommend strongly that Exchange
Group shareholders reject Nasdaq's wholly inadequate offer and take no action in
respect of their shareholdings.


Clara Furse, Chief Executive Officer of the Exchange Group, commented:

'Today's revised SETS forecast, together with the recently announced tariff
changes, support a compelling value creation story for the Exchange Group.  The
Exchange is an increasingly attractive strategic asset in the rapidly evolving
global exchange sector.'


Chris Gibson-Smith, Chairman of the Exchange Group, commented:

'The Board's confidence in the Exchange Group's growth prospects explains the
focus on ensuring the standalone value of the Exchange Group is fully
understood. Nasdaq's wholly inadequate offer persists in undervaluing the
world's capital market. Your Board remains open to a strategic combination and
the Circular explains that shareholders and customers would benefit from a
transaction which properly recognises the value of the Exchange Group and its
markets. Shareholders should not be persuaded to sell their shares below their
true value.'



For further information, please contact:

London Stock Exchange Group plc
John Wallace - Media                                   020 7797 1222
Paul Froud - Investor Relations                        020 7797 3322

Merrill Lynch                                          020 7628 1000
Matthew Greenburgh
Richard Slimmon


Lehman Brothers                                        020 7102 1000
Anthony Fry
Stephen Fox


Finsbury                                               020 7251 3801
James Murgatroyd



* 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 copy of the Exchange Group's Circular is available on:
http://www.londonstockexchange-ir.com/lse/bid/


A conference call for analysts will take place at 09:30 GMT today, Thursday 18
January 2007.  Dial-in details and presentation slides for the conference call
will be available on the Exchange Group's website from 08:30 GMT this morning:
http://www.londonstockexchange-ir.com/lse/bid/key/

A replay of the conference call will be available on the Exchange Group's
website later this morning with details available on the Exchange Group's
website from 08.30 GMT this morning.

http://www.londonstockexchange-ir.com/lse/bid/key/


Sources and bases:

- The increase of at least 180 per cent. in SETS average trades per day in
financial year 2008 is stated relative to financial year 2005.

- The increase in the existing share buyback programme of up to £250 million is
in addition to the £50 million for financial year 2007, of which £18 million
under that programme remains.  Authority for existing share buybacks was granted
at the AGM held on 12 July 2006 and renewal of such authority will be sought at
the next AGM.  The share buyback programme will be undertaken subject to market
restrictions and periods within which no share buyback can be made. The proposed
buyback of up to £250 million supersedes the commitment made in the circular to
shareholders dated 17 February 2006.

- The Exchange Group multiple of 24.4x is calculated as Nasdaq's offer price of
1,243 pence per ordinary share divided by the Exchange Group's adjusted basic
earnings per share for the 12 months to 31 December 2006.

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.

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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange