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LSE holders snub OM bid
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October 30, 2000: 6:47 a.m. ET
Swedish bourse gets 2.7% acceptance for London Stock Exchange offer
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LONDON (CNNfn) - Shareholders of the London Stock Exchange snubbed OM Gruppen's hostile bid Monday, handing over just 2.7 percent of their holdings to the operator of the Swedish bourse.
The Swedish company said it had received acceptances from investors holding 810,725 LSE shares, with 100,000 of those coming from its adviser Enskilda Securities. LSE shares remain far below the level of the OM offer, indicating that investors give the bid little chance of success.
Under British takeover rules, OM's deadline for improving its offer was last Friday, but the Swedish outfit chose not to sweeten its terms. For its offer to succeed, OM needs 75 percent of LSE shareholders to accept the offer. LSE shareholders voted, two weeks ago, to keep a 4.9 percent stakeholding ceiling, further decreasing OM's chances of success.
Sources close to OM said "many shareholders would not show their cards until Nov. 10" the last day for stakeholders to vote on the bid. OM is holding one-to-one meetings with major shareholders in a last-ditch effort to salvage the bid.
The LSE has called OM's £1.06 billion ($1.6 billion) hostile takeover bid as "inadequate." OM offered to pay either 1.4 of its shares for each LSE share, valuing the target stock at £35.83, or 0.5 OM share plus £20 cash, valuing LSE shares at £32.79.
However, LSE shares were unchanged at £24 Monday - where the shares stood before the original OM bid in September. OM Shares slipped 0.50 Swedish crowns to 345.50 ($34.62) in Stockholm.
Analysts believe that rival offers for the LSE could come from other exchanges, including Deutsche Boerse, Euronext NV and Nasdaq. Euronext, formed by the merger of the Paris, Amsterdam and Brussels exchanges, has said it is watching the situation closely. London and Frankfurt called off an earlier attempt to merge, following the approach from OM.
OM Gruppen may itself become a bid target if it fails to get the support it needs by Nov. 10.
Bourses have been facing pressure to merge to provide cheaper and easier trading of stocks from across the region, in response to challenges from newer securities trading mechanisms, such as electronic networks. 
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