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OM bid for LSE fails
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November 10, 2000: 11:38 a.m. ET
London investors overwhelmingly reject hostile bid from Swedish bourse
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LONDON (CNNfn) - Sweden's OM Gruppen failed in its bid to take over the London Stock Exchange Friday, when just 6.7 percent of LSE shareholders voted to accept the hostile $1.36 billion offer, the company announced.
OM shares fell 3.1 percent to 311 Swedish crowns ($31.20) in Stockholm. The stock has fallen more than a quarter since the company first launched its bid on Aug. 29.
LSE shares were trading at 2,460 pence, up 2.5 percent from the previous day's close, but unchanged from before OM's announcement of the results of LSE shareholder voting.
The LSE shareholders' decision was "by no means a vote of cofidence" in the leadership of the LSE, according to Mark Powell, chairman of APCIMS, the trade body for U.K. retail stock brokers. He said the LSE had bought itself some time through the collapse of OM's offer.
OM Chief Executive Per Larsson said the LSE "had now simply deferred addressing the problems it faces."
OM's latest offer had valued each LSE share at as much as £30.90.
For each share in its target, the Swedish company had offered LSE's owners a choice of either 1.4 new OM shares, or 0.5 of an OM share plus £20. The bid valued the British exchange at more than £937 million ($1.36 billion) at Thursday's closing stock price.
The LSE management team had earlier rejected the offer as inadequate.
Analysts say that rival offers for the London exchange might emerge following the failure of OM's bid, and they cite Deutsche Boerse AG, Euronext NV and the U.S.'s Nasdaq market as possible interested parties. The London and Frankfurt exchanges called off an earlier attempt to merge when the OM bid emerged.
"We are looking at the situation with close interest, we believe in the long term there will be a consolidation in European exchanges," said Robert Bakker of Euronext Amsterdam. Eurnonext was formed this year by the merger of the Paris, Amsterdam and Brussels exchanges.
LSE declined to comment on the possibility of future mergers, although Chairman Don Cruickshank has spoken of the potential for problems in mergers between European and U.S. exchanges.
Bourses have been facing pressure to merge to provide cheaper and easier trading of stocks from across the region.
-- from staff and wire reports 
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