Spooky

29 January 2007 By Nicole Lee

Nasdaq is now warning it may not sell its 29% stake to another bidder, undermining previous threats it could sell and cause an overhang. Without the carrot of a higher offer, Nasdaq has to rely on the stick but its switch in tactics smacks of desperation.

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Nasdaq this week is expected to hold talks with London Stock Exchange shareholders to convince them its £12.43ashare offer is full and fair. It is understood that Nasdaq will discuss a range of options, which includes holding on to its 29% stake instead of selling it to another bidder. Nasdaq has previously emphasized that if its offer lapses, it could dispose of its LSE shares, creating a significant overhang of LSE shares.

In recent days, several hedge funds have been adding to their holdings, including Paulson & Co, Sisu Capital, Davidson Kempner, and Chesapeake, according to regulatory filings. Others, such as Sandell, have been selling.

LSE shares drifted slightly lower January 29 to £12.86, trading 3% above Nasdaq's offer price.

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