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NDAQ » Topics » An attractive offer which fully reflects both LSEs standalone prospects and an appropriate premium

This excerpt taken from the NDAQ 8-K filed Nov 20, 2006.

An attractive offer which fully reflects both LSE’s standalone prospects and an appropriate premium

 

•   NASDAQ appreciates LSE’s strong standalone growth prospects. In particular, NASDAQ recognises the strong growth in SETS volumes of 56 per cent. year-on-year for the six months to September 2006, the strong new issue activity currently being experienced and the growth in related activities

 

•   This potential needs to be set against the fact that LSE’s share price has risen 216 per cent. over the past two years and 103 per cent. over the past year vs. net income growth of 75 per cent. and 50 per cent. respectively. NASDAQ believes this potential, as well as the significant synergy benefits of a combination, are fully reflected in its offer price

 

•   An offer price of 1,243 pence per LSE Ordinary Share represents:

 

  - a 54 per cent. premium over the Closing Price on 10 March 2006, the Business Day immediately prior to LSE’s announcement that it had received a pre-conditional approach from NASDAQ, adjusted for the LSE Capital Return;

  - a 40 per cent. premium to NASDAQ’s indicative offer price of 9 March 2006 as adjusted for the LSE Capital Return; and

 

  - a multiple of 27.9x adjusted earnings for the 12 months to 31 March 2006 and a multiple of 24.9x consensus earnings forecast for the 12 months to 31 March 2007

 

•   NASDAQ will today submit a filing to the OFT in relation to the Transaction and does not expect the Transaction to give rise to any significant antitrust issues

 

•   The Transaction is not subject to any other formal regulatory approvals nor does it require NASDAQ shareholder approval

 

•   The Transaction is expected to complete in the first quarter of 2007

 

•   The Final Offers will not be revised except that NAL reserves the right to revise the Final Offers: (i) upon the 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
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