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Monday 05 February, 2007

NASDAQ Stock Market

Response to LSE Defence Doc.

NASDAQ Stock Market, Inc. (The)
05 February 2007

  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

                    RESPONSE TO LSE'S THIRD DEFENCE DOCUMENT

The Board of The Nasdaq Stock Market, Inc. ('NASDAQ') notes the publication of a
third defence document (the 'Circular') by London Stock Exchange Group plc
('LSE') earlier today.

LSE's value case is misleading

NASDAQ notes that LSE's value case continues to be based on historic trading
multiples for a diverse peer group - a methodology which NASDAQ has previously
highlighted as misleading due to the different maturities and business mix of
LSE's self serving and misguided peer group selection.

None of the peers chosen by LSE faces the same combination of customer
dissatisfaction, regulatory changes and competitor consolidation as LSE.

LSE has completely failed to explain to shareholders how it will address these
challenges and we believe its failure to do so provides further evidence of
LSE's complacency. Shareholders should be concerned about the impact of these
factors on the value of their LSE shares.

Rejection of NASDAQ leaves LSE in a strategic vacuum

LSE again fails to provide a long-term strategic vision for the business and
focuses purely on short term reactive initiatives. LSE remains unable (or
unwilling) to identify, let alone consummate, an alternative transaction which
would increase liquidity, provide synergies and diversify the business.

We believe a combination with NASDAQ satisfies all the criteria which LSE has
identified for a partner. Given this fact and LSE's statement that 'a
combination, on the right terms, with another exchange could be in the best
interests of shareholders and customers' it is extraordinary that LSE has
completely refused to engage with NASDAQ over the last year. We believe
shareholders should take note of LSE's complete disinterest in taking part in a
dialogue which could lead to a recommended offer.

Commenting on the Circular, NASDAQ President and CEO Robert Greifeld said:

'We continue to believe that 1,243 pence in cash represents a full and fair
price for LSE shareholders. Without NASDAQ, LSE will be left in a strategic
vacuum, to the detriment of LSE shareholders and the London market alike.
Shareholders should note LSE's consistent disinterest in taking part in dialogue
with respect to consolidation, even when its own strategic criteria could be
satisfied. Shareholders should not think this attitude will change any time
soon.'

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.

LSE Shareholders who have not yet accepted the Final Offers and who hold LSE
Shares in certificated form (that is, not through CREST) 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 1.00 p.m. (London
time) on Saturday 10 February 2007.

LSE Shareholders who have not yet accepted the Final Offers and who hold LSE
Shares in uncertificated form (that is, through CREST), 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 1.00 p.m.
(London time) on Saturday 10 February 2007.

Copies of the Offer Document, the First Response Document, the Second Response
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 Offer
Document, the First Response Document and the Second Response Document are also
available on www.nasdaq.com.

Save as defined above, capitalised terms used in this announcement have the same
meaning as in the Offer Document dated 12 December 2006, the First Response
Document dated 8 January 2007 and the Second Response Document dated 23 January
2007.

* The Final Offers will not be revised except that NAL reserves the right to
revise the Final Offers if a firm intention to make a competing offer for LSE is
announced, whether or not subject to any preconditions.


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, in respect of shares held in certificated form
(that is, not through CREST), 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 where to do so would violate
the laws of that 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.

In accordance with the City Code, normal United Kingdom market practice, and
subject to applicable regulatory requirements and pursuant to exemptive relief
granted by the US Securities and Exchange Commission from Rule14e-5 under the US
Securities Exchange Act of 1934, (i) Dresdner Kleinwort Securities Limited and/
or its affiliates will continue to act as connected exempt principal traders in
LSE Shares on the London Stock Exchange and may from time to time make certain
purchases of, or arrangements to purchase, LSE Shares or futures contracts or
indices over LSE Shares outside the United States, other than pursuant to the
Final Offers, before or during the period in which the Final Offers remain open
for acceptance, and (ii) NAL, its affiliates, or their respective nominees or
brokers (acting as agents), may from time to time make certain purchases of, or
arrangements to purchase, LSE Shares outside the United States, other than
pursuant to the Final Offers, before or during the period in which the Final
Offers remain open for acceptance. These purchases may occur either in the open
market at prevailing prices or in private transactions at negotiated prices.
These purchases, or arrangements to purchase, shall comply with applicable rules
in the United Kingdom, including the City Code, the rules of the UK Listing
Authority and the rules of the London Stock Exchange and applicable US
securities laws (except to the extent of any exemptive relief granted by the US
Securities and Exchange Commission from Rule 14e-5). Any information about such
purchases will be disclosed as required in the United Kingdom pursuant to the
City Code and will be available from the Regulatory Information Service of the
UK Listing Authority and will be available in the United States at
www.nasdaq.com.

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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