The London Stock Exchange has launched its defence against the hostile £808 million takeover bid by Sweden's OM Gruppen, branding it "wholly inadequate".
The LSE said the offer "represents a terminal loss of influence for LSE shareholders over the London Stock Exchange".
LSE added the OM bid "fundamentally undervalues the London Stock Exchange's pre-eminent market position, its financial strength and its prospects".
Chairman Don Cruickshank said: "We believe that OM's offer is an attempt to buy your company on the cheap, predominantly using new OM shares, which are of uncertain value." The Swedish bid forced the LSE earlier this month to terminate merger talks with Germany's Deutsche Borse, which would have seen the pair create a joint stock exchange called iX.
LSE management have set the date of October 19 for an extraordinary general meeting to discuss the exchange's 4.9 per cent shareholding limit. This limits the maximum shareholding by any group in the LSE to 4.9 per cent but, as it would need to be waived for OM's bid to succeed, OM has asked shareholders to scrap the limit.
OM, which is 9.5 per cent Swedish state-owned and 15.3 per cent owned by Sweden's Wallenberg family, was a "tightly held" company that, if successful in its bid, would mean diminished influence for existing LSE shareholders, said Mr Cruickshank.
OM's technology would "bring nothing" to LSE, he added.
Two weeks ago Mr Cruickshank and chief executive Gavin Casey were nearly ousted from the board at a stormy AGM, where shareholders were highly critical of the iX plan and its failure. Mr Casey resigned the following day.
Mr Cruickshank would not be drawn on the possibility of a rival friendly bid for LSE, amid speculation an offer could be launched from the US Nasdaq exchange, combined with Euronext, the merged Paris, Brussels and Amsterdam exchange launched last week.
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