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Tuesday 19 December, 2006

NASDAQ Stock Market

Response to LSE Circular

NASDAQ Stock Market, Inc. (The)
19 December 2006


FOR IMMEDIATE RELEASE

  THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
                              AUSTRALIA OR CANADA

                               FINAL CASH OFFERS*

                                       BY

                        NIGHTINGALE ACQUISITION LIMITED
          (A WHOLLY OWNED SUBSIDIARY OF THE NASDAQ STOCK MARKET, INC.)

            FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

                        LONDON STOCK EXCHANGE GROUP PLC

The Board of The Nasdaq Stock Market, Inc. ('NASDAQ') notes the publication
earlier today of a document (the 'LSE Defence Circular' or 'Circular') by London
Stock Exchange Group plc in response to NASDAQ's Final Cash Offers.

The NASDAQ Board believes that its Ordinary Offer of 1,243 pence per share
reflects (i) a realistic assessment of standalone value in the context of the
new competitive threats which LSE will face; (ii) a premium for control
(NASDAQ's Ordinary Offer represents a premium of 54 per cent. to LSE's
undisturbed share price on 10 March 2006); and (iii) a fair share of synergies,
when account is taken of sharing benefits with users.

LSE's current share price is not supported by the company's standalone prospects
and is only sustainable because of NASDAQ's Final Cash Offers.

The LSE Defence Circular completely fails to address the concerns of users and
the implications of the increased level of competition that will be introduced
with the regulatory changes which will occur in 2007.  LSE has failed to
adequately share the benefits of its growth with its customer base.  This is
illustrated by the modest cost reductions evidenced in the Circular which
include reductions in charges for post trade services by entities which are not
owned by LSE (for example CRESTCo and LCH.Clearnet).  The emergence of these new
competitive threats will force LSE to focus on the imbalance between shareholder
and user interests.  This impact is not reflected in the current or historical
financials upon which LSE's value case is based.

The Circular relies exclusively on historic and 2006 P/E multiples.  The NASDAQ
Board disputes the claim made by LSE management on this morning's analyst call
that they 'don't think that using 2007 (P/E) multiples tells a substantially
different story'.  For example, NASDAQ's 2007 P/E based on IBES consensus
forecasts is 23.1x in comparison with a 2006 P/E of 47.0x, reflecting the
ongoing transformation of the NASDAQ business.

The NASDAQ Board would also draw LSE Shareholders' attention to the fact that of
the 2006 P/E multiples shown in the Circular, Euronext N.V. ('Euronext') is the
only European sector multiple in excess of the NASDAQ Ordinary Offer.  The
NASDAQ Board believes that Euronext is an inappropriate comparable because it is
dependent upon the offer from NYSE, where the shareholders of Euronext will be
receiving shares amounting to over 75 per cent. of the total consideration on a
2006 earnings multiple of 59.5x, as opposed to straight cash.

Commenting on the Circular, NASDAQ President and CEO Robert Greifeld said 'The
Board of LSE is ignoring the elephant in the room at its peril.  Its recent
growth in revenues has taken place without a proper sharing of benefits with
users.  Regulatory changes, increased consolidation and customer group
competition are likely to bring significant downward pressure on LSE's revenue
model going forward.  There is nothing in the Circular which causes us to change
our view on value.'

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.

* The Final Offers will not be revised except that NAL reserves the right to
revise the Final Offers: (i) upon a 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 (a 'competitive situation').

Save as defined above, capitalised terms used in this announcement have the same
meaning as in the Offer Document dated 12 December 2006.

Sources and bases

LSE's forecast adjusted basic earnings per share for the 12 months to 31
December 2006, the associated NASDAQ Ordinary Offer multiple and the Euronext
and NYSE trading multiples are sourced from the Circular.  NASDAQ's P/E
multiples are calculated based on the closing NASDAQ price on 15 December 2006
and IBES consensus forecasts for NASDAQ sourced from Bloomberg.


ENQUIRIES

The Nasdaq Stock Market, Inc.                    Tel: +1 (212) 401 8714
Bethany Sherman                                       +1 (917) 836 1724

Greenhill & Co. International LLP                Tel: +44 (0)20 7198 7400
(lead financial adviser to NASDAQ and NAL)
Simon Borrows
Richard Hoyle

Dresdner Kleinwort Securities Limited            Tel: +44 (0)20 7623 8000
(broker to NASDAQ and NAL)
Angus Kerr
Alex Reynolds

Gavin Anderson & Company                         Tel: +44 (0)20 7554 1403 / 1405
(PR adviser to NASDAQ and NAL)                                            
Richard Constant


Greenhill & Co. International LLP, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
NASDAQ and NAL and for no-one else in connection with the Final Offers and will
not be responsible to anyone other than NASDAQ and NAL for providing the
protections afforded to clients of Greenhill & Co. International LLP or for
giving advice in relation to the Final Offers.

Dresdner Kleinwort Securities Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
NASDAQ and NAL and for no-one else in connection with the Final Offers and will
not be responsible to anyone other than NASDAQ and NAL for providing the
protections afforded to clients of Dresdner Kleinwort Securities Limited or for
giving advice in relation to the Final Offers.

This announcement does not constitute an offer to sell or an invitation to
purchase any securities or the solicitation of an offer to buy any securities,
pursuant to the Final Offers or otherwise. The Final Offers are being made
solely by the Offer Document and the Forms of Acceptance accompanying the Offer
Document, which contain the full terms and conditions of the Final Offers,
including details of how the Final Offers may be accepted.

Unless otherwise determined by NAL, the Final Offers are not being, and will not
be, made, directly or indirectly, in or into or by the use of the mails of, or
by any means or instrumentality (including, without limitation, facsimile
transmission, telex, telephone or e-mail) of interstate or foreign commerce of,
or by any facilities of a national securities exchange of, Australia or Canada
or any jurisdiction where to do so would violate the laws of that jurisdiction
and will not be capable of acceptance by any such use, means, instrumentality or
facility or from within Australia or Canada or any such jurisdiction.
Accordingly copies of this announcement are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent in, into or
from Australia or Canada or any such jurisdiction, and persons receiving this
announcement (including, without limitation, custodians, nominees and trustees)
must not mail or otherwise distribute or send it in, into or from such
jurisdiction as doing so may invalidate any purported acceptance of the Final
Offers.  Any person (including, without limitation, any custodian, nominee or
trustee) who would, or otherwise intends to, or who may have a contractual or
legal obligation to forward this announcement and/or the Offer Document and/or
any related document to any jurisdiction outside the United Kingdom and the
United States should inform himself of, and observe, any applicable legal or
regulatory requirements of that jurisdiction.

The NAL Directors and the NASDAQ Directors accept responsibility for the
information contained in this announcement, save that the only responsibility
accepted by them in respect of information in this announcement relating to LSE,
which has been compiled from public sources, is to ensure that such information
has been correctly and fairly reproduced and presented.  Subject as aforesaid,
to the best of the knowledge and belief of the NAL Directors and the NASDAQ
Directors (each of whom has 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.




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