Saturday, November 25, 2006

Nasdaq attempts to takeover London Stock Exchange

Source: Mayor joins fight to halt Nasdaq bid for London - Guardian

The UK’s Office of Fair Traiding, at the behest of London’s Mayor, Ken Livingstone, is set to investigate a takeover bid by the U.S. based Nasdaq of the London Stock Exchange. The London Mayor believes there is reason to refer Nasdaq’s £2.7bn offer over to the Competition Commission – a commission with the power to completely block the proposed take-over.

The Mayor further believes that, given the fact that the NYSE, Nasdaq and the LSE represent a major part of the world’s stock exchanges requires a serious inquiry into such a bid – a bid that would significantly reduce competition amongst stock exchanges. Experts believe that the bid was prompted by America’s loss to the LSE of several foreign listings as a result of the crippling US rules under Sarbanes-Oxley (a Federal law passed in response to several corporate and accounting scandals, such as that with Enron). Livingstone further fears that the LSE would not be able to avoid heavy-handed American regulation.

Meanwhile, the LSE is seeking allies to thwart the potential takeover by the Americans, including OMX of Sweden. According to Livingstone, this year the LSE “raised £22.3bn in [listings of new companies]” compared to just £6.4bn raised by Nasdaq.


- Would an American takeover of the UK’s LSE prove to be more beneficial than harmful? If so, would it benefit mainly Americans, or those involved from all sides?

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