Nasdaq plays hard ball in latest bid for control of London Stock Exchange

With the LSE's market price closing comfortably above this at around 1,295p, it was clearly steely-eyed brinkmanship by Nasdaq chief executive Bob Greifeld. Nasdaq is sitting on a near 30-per cent stake in the LSE, and Greifeld obviously hopes enough shareholders will be scared of the share price plummeting if the bid doesn't succeed to accept what is on the table.

Maybe they will, maybe they won't, but it is a very tight call. A lot of the hedge funds and arbitrageurs have bought into the LSE, seeking to make a profitable turn on a takeover deal, but at prices above what Nasdaq is offering. In short, those speculators could therefore be looking at cutting their losses rather than making any profit on their would-be opportunism.

That makes it not the greatest pitch to investors from a predator that I have ever heard.

Contrary to what the LSE says, Nasdaq's offer is not a brazenly low one. But it is not a knockout no-brainer one for investors to unquestionably snap up either.

The London exchange's share price has trebled in the past two years largely, but not solely, due to takeover speculation that has also included unsuccessful suits from Frankfurt, Euronext and Macquarie Bank of Australia.

But two things one would have thought Nasdaq would have borne in mind. One, that the LSE's trading figures, right up to the final quarter of 2006, have been sparkling. The LSE is therefore defending from a position of strength.

Second, even though the LSE's share price has fallen back after each failed takeover approach, it has quickly recovered on the back of continued robust trading in all the exchange's main business fields, from issuer and broker services to the provision of real-time stockmarket information.

A typical key investor facing this decision to cave in or sit tight against Nasdaq's poker-playing, is the US's Samuel Heyman.

His investment vehicles, Heyman Investment Associates and Vesper Holdings, are sitting on a 10.44 per cent stake in the London exchange, partly through derivatives such as options and contracts for difference.

His decision on the bid may be crucial in influencing other wavering shareholders one way or the other, and therefore he might well go public with this decision.

Greifeld could ironically be hoping that enough shareholders who bought into the LSE at lower levels will take profits in the market over the next two weeks because of the uncertainty of the bid succeeding by its closure date of 10 February.

That in turn could drive the market price below Nasdaq's 1,243p offer, thereby removing one of the target's key defences.

A major influence on how this battle now pans out is therefore what happens to the LSE's share price. But it still makes you wonder whether the brinkmanship was necessary on the part of the American exchange.

It has given fuel to LSE chief executive Clara Furse's allegation (if overcooked) that Nasdaq is trying to swallow a pre-eminent asset among international financial exchanges on the cheap.

By contrast, a raised bid of say 13 a share could stand a very good chance indeed of carrying the day. Greifeld could end up accused if Nasdaq fails by spoiling the ship for a h'apporth or two of tar.

Window of opportunity?

HOPE springs eternal in the football fan's breast. Shareholders in sports retailer JJB Sports may have been jolted by founder David Whelan's move yesterday in selling some 50 million worth of shares in the company.

It took Whelan's stake down from 37.6 per cent to 29 per cent, and sent JJB's shares down nearly 4 per cent.

But the stockmarket cloud had a potential silver football lining. There is now speculation that Whelan wants the cash to buy players in the January transfer window for his football club Wigan Athletic, currently floundering in the English Premiership relegation zone.

Whelan has previously spent heavily in the club. But apart from his football passion, he also showed astute investor timing. JJB, one of the biggest football shirt retailers in Britain, has seen its shares outrun the UK general retailers index by not far off a third in the past 12 months. Of course, shareholders might conceivably not lose out entirely. Another way of viewing yesterday's share sale by Whelan is that his commitment to JJB is not as strong as it once was, perhaps paving the way for a takeover bid.

Perhaps Whelan thinks he can kill two birds with one stone: help out his beloved Latics with some fresh footballing talent while also sending out a subtle signal to potential bidders for JJB.

Man U score off the pitch

FROM a footballing minnow to a giant: Manchester United, whose annual results yesterday showed why the Glazer family wanted it so much despite the hostile opposition from fans to their successful takeover bid.

The English Premiership leaders said profit before tax nearly trebled to 30.8 million (operating profit growth was a little more modest) in their first full year under the ownership of the Americans.

Manchester United is a formidable moneymaking machine, from gate receipts and television to sponsorship and merchandising, giving the club a commercial edge over virtually all their Premiership rivals.