Macquarie threatens LSE pullout

Macquarie Bank has confirmed it will not increase its current offer of 580p for shares in the London Stock Exchange (LSE) and has threatened to pull out of the running once that bid expires at the end of the month, according to a company statement.

The Australian bank, operating through the investment vehicle Macquarie London Exchange Investments (MLX), which was set up specifically to cover the potential deal, made the offer on December 9 and was subsequently rejected by the management of the exchange.

It values the LSE at £1.5 billion – almost 19 times the exchange's expected earnings this year but well below its current stock price. Last night, the price hit 829.5p, its highest closing level since the LSE was floated in mid-2001.

“In evaluating any potential transaction, Macquarie takes a disciplined approach to valuation, while considering the views of all relevant stakeholders,” said Jim Craig, MLX director and head of the Macquarie Group in Europe. “Europe is a key growth area for Macquarie and we continue to look forward to many attractive opportunities in the region.”

Deutsche Börse and the pan-European derivatives exchange Euronext have also been cited as potential purchasers of the London exchange.