Battle between London Stock Exchange and Nasdaq reaches climax

The battle between the London Stock Exchange PLC and the Nasdaq Stock Market Inc. for control of the British bourse reaches a climax Saturday with the deadline for shareholders to accept the Nasdaq's hostile 2.7 billion pound (US$5.3 billion; EUR4.1 billion) offer.

Analysts said the struggle, which has grown increasingly acrimonious over the past several months, is likely to persist until the last minute as both sides lobby key investors.

"It's a Mexican standoff," said Clem Chambers, chief executive of stock Web site ADVFN. "It's going to be very tight."

Nasdaq, which abandoned a previous attempt to acquire the LSE, this time refused to raise its 1,243 pence (US$24.35; EUR18.75) per share bid. The New York-based exchange did extend the offer period by two weeks after announcing at an earlier deadline that it had received assurances for just 0.62 percent of the shares.

Added to the 28.75 percent it built up by buying in the market in recent months, that remains well short of the 50 percent it needs to begin taking control but some key investors could swing the result, reports AP.

The LSE's fate is likely to be decided by hedge funds and other arbitrageurs, led by U.S. investor Samuel Heyman, who has built up a 10.3 percent stake during the bid.

Chief Executive Clara Furse said last month that she had spoken with Heyman, whose stake entitles him to call an extraordinary general meeting to potentially force the LSE board to open talks with the U.S. exchange. She said talks with all major shareholders were "constructive," and declined to comment further.

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