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Swedes extend LSE offer
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October 3, 2000: 9:03 a.m. ET
OM Gruppen cites 'good progress' in wooing owners of London exchange
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LONDON (CNNfn) - Swedish stock exchange operator OM Gruppen on Tuesday extended its unsolicited $1.2 billion bid to buy the London Stock Exchange, insisting it has made "good progress" in wooing shareholders of the company that runs Europe's largest stock market.
OM Gruppen, extending the offer until Oct. 23, said LSE shareholders had by Monday agreed to tender about 300,000 shares, representing about 1 percent of the London exchange's total shares. The Stockholm market operator said its investment bank, Lazard, owned 200,000 shares, or roughly 0.67 percent of the total.
"When we launched our offer for LSE, we knew that the issues were complex, therefore we did not anticipate significant acceptances at this stage" Per Larsson, president and chief executive officer of OM Gruppen, said in a statement. "In discussions with the LSE members that we have had across the country, we have made good progress."
LSE Chairman Don Cruickshank shot back at what he called OM's "opportunistic" bid, insisting shareholders haven't cottoned to the deal. "This negligible level of acceptances for OM's offer endorses the board's view that OM is offering wholly inadequate value to the London Stock Exchange's shareholders and no proven benefits for customers."
"The London Stock Exchange is not up for sale," Cruickshank said in a statement, adding that its strategy "may involve doing deals, but it does not necessarily have to." Last week, he said the offer would leave LSE shareholders with a "terminal loss of influence" over the exchange.
OM lashed out at the LSE for calling an extraordinary general meeting of its shareholders for Oct. 19, saying that would not give those shareholders enough time to properly consider the takeover bid. Larsson urged LSE shareholders to vote to remove the exchange's regulation that prevents any holder from exercising more than 4.9 percent of the company's votes.
Meanwhile, speculation has been rampant that the newly formed Euronext exchange, which unites the bourses of Paris, Amsterdam and Brussels, or the U.S. Nasdaq exchange might make a bid for the LSE. Euronext has said that it is exploring its options.
Also lingering in the wings is the Deutsche Boerse, the operator of the Frankfurt Stock Exchange, which struck an agreement to merge with the LSE last May - only to see the London exchange pull out of that merger of equals last month so it could work to fend off the OM bid.
Deutsche Boerse Chairman Rolf Breuer has left the door open for the LSE to revive that deal.
OM Gruppen, the world's first publicly traded stock exchange operator and a leading provider of exchange operating software, has touted its ability to generate cost savings by absorbing the London exchange.
Shares of the LSE, which are traded on the in-house system of blue-blooded securities firm Cazenove, fell 50 pence, or 1.7 percent, to 2,900 pence in late morning trade on Tuesday. OM Gruppen shares rose 4 crowns, or 1 percent to 416 in Stockholm. 
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