This excerpt taken from the NDAQ 8-K filed Nov 20, 2006.
Background to the Final Offers
NASDAQ has for some time regarded LSE as an attractive business. NASDAQ and LSE have held preliminary discussions with respect to a possible business combination or other strategic transaction on a number of occasions in the past.
Contact between the parties occurred in both August 2005, prior to the announcement by Macquarie of its interest in a potential acquisition of LSE, and in December 2005, following Macquaries announcement of a hostile offer to acquire London Stock Exchange plc at 580
pence per share. On each occasion, NASDAQ concluded that it should focus on its immediate standalone objectives rather than attempt to consummate a business combination. Following the lapse of Macquaries offer on 28 February 2006 and the completion of the Instinet Transactions and NASDAQs subsequent secondary offering, NASDAQ approached LSE.
Believing that a non-binding offer would be of interest to the Board of LSE and favourable to shareholders of LSE, on 9 March 2006, NASDAQ sent LSE a proposal for a business combination between NASDAQ and LSE which included an indicative cash offer for LSE of 950 pence per London Stock Exchange plc share (equivalent to approximately 889.5 pence per LSE Ordinary Share, post the LSE Capital Return).
On 10 March 2006, LSE publicly announced receipt of an approach from NASDAQ and rejected the preliminary offer stating that it believed that the offer substantially undervalued LSE. LSE was unwilling to entertain discussions with NASDAQ during the course of March 2006 and, as a result, on 30 March 2006 NASDAQ announced that it no longer intended to make an offer for LSE, subject to certain limited circumstances.
On 11 April 2006, NASDAQ announced that the NASDAQ Group had acquired 14.99 per cent. of the issued ordinary share capital of London Stock Exchange plc at a price of 1,175 pence per share (equivalent to approximately 1,156 pence per LSE Ordinary Share, post the LSE Capital Return) from certain shareholders of LSE. Between 3 May 2006 and 19 May 2006, NASDAQ announced additional purchases of London Stock Exchange plc shares which brought the NASDAQ Groups aggregate holdings in LSEs issued ordinary share capital to 25.1 per cent. As a result of subsequent share repurchases by LSE, NASDAQs current holdings represent approximately 25.4 per cent. of LSEs issued ordinary share capital.