Statement re Possible Offer

London Stock Exchange Plc
27 January 2005


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN


27 January 2005


ANNOUNCEMENT RE:  DEUTSCHE BORSE PROPOSED PRE-CONDITIONAL OFFER


The Board of the London Stock Exchange notes the announcement by Deutsche Borse
of a proposed pre-conditional cash offer for the London Stock Exchange of not
less than 530 pence per share.

The Board believes firmly that this proposed pre-conditional cash offer does not
recognise the inherent value in the London Stock Exchange's business, the
related synergies available in a combination and the attractive growth prospects
that the London Stock Exchange enjoys under its existing management team.

The London Stock Exchange has demonstrated a clear strategy of delivering value
for shareholders.  Since its demutualisation and listing, the London Stock
Exchange has delivered an excellent return for its shareholders by managing an
efficient and focused exchange business.  Through effective management, the
London Stock Exchange has reduced its own and market-related costs and
significantly improved efficiency.  Its high quality, low cost services continue
to drive growth in UK equity market business.

As announced today, third quarter results were good with gross turnover of £66.3
million, representing a 5 per cent increase over the same period last year.
This was driven by strong increases in Broker Services (10 per cent) and
Information Services (13 per cent).  Market trends continue to look positive,
with an increased number of equity bargains (281,000 per day and totalling £1.2
trillion), increased trading volumes on SETS and increasing new issue activity,
particularly on AIM.

The London Stock Exchange's current prospects are strengthened by a number of
cost and revenue initiatives to continue to grow the business and deliver value
to shareholders and customers.

One of the London Stock Exchange's key commercial advantages is the superior
quality and performance of its technology platform.  The "technology roadmap"
initiative involves the current migration from the existing IT platform onto
next generation .NET technology.  The Board believes that the "technology
roadmap" provides an important step-change in the quality, functionality and
scaleability of London Stock Exchange market services at significantly lower
cost.

There are also a number of organic growth opportunities underway which should
improve revenues significantly by 2008.  These include further enhancements to
the trading services product offering and a further diversification of our
information services product lines.  The London Stock Exchange will be
communicating with its shareholders on these, and other new initiatives, in due
course.

Whilst the Board of the London Stock Exchange is confident of the London Stock
Exchange's strong growth prospects as an independent group, the Board believes
that a combination, on the right terms, of the London Stock Exchange with
another major stock exchange could be in the best interests of shareholders and
customers.

A key additional aspect of the Board of the London Stock Exchange's
consideration of any offer proposal is an evaluation of an offer's prospects of
implementation given the requirement for regulatory approval.  The Board of the
London Stock Exchange is focused on ensuring that any proposal is capable of
implementation.

In view of the terms of the offer proposal, the Board of the London Stock
Exchange, which has been so advised by Merrill Lynch, rejects Deutsche Borse's
pre-conditional offer.  The London Stock Exchange's shareholders are advised to
take no action.  

The London Stock Exchange is willing to continue to hold discussions with
Deutsche Borse and Euronext about the possibility of a significantly improved
offer for the London Stock Exchange.

For further information, please contact:

 The London Stock Exchange
 John Wallace - Media                  [phone]
 Paul Froud - Investor Relations       [phone]

 Merrill Lynch                         [phone]
 Matthew Greenburgh
 Richard Slimmon

 Media
 Finsbury                              [phone]
 James Murgatroyd
 Simon Moyse


Merrill Lynch International is acting as financial adviser to the London Stock
Exchange plc in relation to the matters referred to in this announcement and no
one else and will not be responsible to anyone other than the London Stock
Exchange plc for providing the protections offered to clients of Merrill Lynch
International nor for providing advice in relation to the matters referred to in
this announcement


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