LSE, trying to fight off Nasdaq, says third-quarter profit rose 9.9 percent

The London Stock Exchange PLC, fighting off a takeover bid by the Nasdaq, said Tuesday that third-quarter profit rose 9.9 percent after the number of trades and the average size of initial public offerings rose.

Photo: LSE, trying to fight off Nasdaq, says third-quarter profit rose 9.9 percent

Europe's largest bourse saw net income rise to 31 million pounds (US$60.2 million; Ђ46.1 million) in the three months through Dec. 31, from 28.2 million pounds in the same period a year earlier, the London-based company said in a statement. Revenue rose 11 percent to 88.9 million pounds (US$171.8 million; Ђ132 million).

"This excellent performance supports the board's rejection of Nasdaq's offer which significantly undervalues the business and the Exchange's unique strategic position," said CEO Clara Furse. "We believe that our strong growth prospects will continue to enhance the quality of our markets and the value of our international brand, delivering increasing value to our shareholders and our market."

On Monday the New York-based Nasdaq Stock Market Inc. urged LSE shareholders to accept a 2.7 billion pound (US$5.2 billion; Ђ4 billion) takeover offer and accused the LSE of "milking" customers who are increasingly becoming dissatisfied.

The largest U.S. all-electronic stock exchange gave LSE investors until Thursday to accept its offer. The Nasdaq, which already owns nearly a 29 percent stake in the LSE, said the combination would solidify London's position as Europe's No. 1 financial center.

Nasdaq, which has said it will not raise its offer, reiterated its case on Tuesday.

The results "take no account of the impact that growing customer dissatisfaction, the new competitive threats introduced by upcoming regulatory changes, or accelerating consolidation will have on LSE's future financial performance," Nasdaq said in a statement, reports AP.

But Cubillas Ding, an analyst at London-based Celent, said that Nasdaq's tone, "while still fronting a hostile posture, seems to be more open to the possibility that it may need to explore alternative means to crack Europe markets other than through the LSE."

He noted that after "Nasdaq originally pulled out of its European venture in 2003 and sold off its technology assets to Easdaq (formerly Nasdaq Europe), Nasdaq U.S. is now finding itself back full circle."

London Stock Exchange shares were little changed at 1,281 pence (US$24.75; Ђ19.03), reports AP.

Nasdaq is under pressure to find a European partner amid trans-Atlantic consolidation, as the New York Stock Exchange is close to completing a deal with Euronext NV.

An LSE combination with Nasdaq would create the world's largest equity market by listings, made up of more than 6,400 quoted companies with a total market capitalization of US$12.4 trillion.