Merging Nasdaq with the LSE makes real strategic sense and creates deep liquidityarch 11 2006 02:00
A merger of Nasdaq with the London Stock Exchange would bring together the world's second-largest exchange with the dominant operator in the UK, creating a deep pool of liquidity.
Analysts believe a tie-up would make ample strategic sense.
The stock market agreed. Within minutes of the announcement of the approach - and of the LSE's rejection - Nasdaq's stock had gained more than 6 per cent to trade at $41.95, even though sentiment in New York was that it would need to offer more before any transaction could be closed.
The reaction of the LSE's major shareholders was equally positive, although they also made clear that they expected more.
Nick Train, a fund manager at Lindsell Train, who has the LSE as one of his top 10 holdings, said: "The prize of creating a seamless global exchange is great and the LSE is the closest to that. Anyone with vision of how equities will be traded will need a strategic alliance with the LSE and probably want to own it."
He added: "I've given up valuing the business. As an acquisition, it is hard to value. All I know is it is the asset you need if you wish to create a global exchange. And as a shareholder, I would like to be presented not just with straight cash but with an equity combination that could release a lot of value. It would be more attractive".
David Keir, a fund manager at the Scottish Widows Investment Partnership said: "We note that the value of bids is getting closer to our value of the business. We have consistently said over this long process that the LSE is a valuable organisation. The last set of results demonstrated this inherent value. We look forward to discussing this offer with Nasdaq and to continued dialogue with LSE."
Analysts believe the deal made strategic and technical sense. "This makes more strategic sense than perhaps any other offer that the LSE has received so far," said Harrell Smith, head of the securities and investments practice at Celent, the financial services consultancy. "More importantly, it makes more sense than a potential offer from the NYSE."
Nasdaq, he argued, had created a key strategic advantage for itself with its technological architecture, which now includes the platform it bought last year from Instinet. "Applying that technology to the LSE would really help the LSE see significant cost savings," he said.
"The NYSE is obviously flush with cash, but they wouldn't be able to offer the same kind of technology synergies."
Several exchange insiders indicated that combining Nasdaq's platform with the LSE's would be relatively easy. They also trust Robert Greifeld, Nasdaq's chief executive and a trained engineer, to avoid errors in any integration process. Technology would be more of a barrier for the NYSE, which is in the process of moving to "hybrid" involving both its traditional floor trading and the electronic technology it gained from its merger with Archipelago Holdings, which closed this week.
The economics of exchanges are dictated by pushing as much trading volume as possible through one trading platform. Thus, an increase in the number of trades put through a common platform should pass almost directly to the bottom line.
The easiest way to increase liquidity on an equity exchange is to buy it.
The US and UK equity markets are mature and highly efficient. Once technology gains have allowed for faster trading, the only way to log significant increases in volume is to take on more companies.
Hellman & Friedman, the private equity firm that is Nasdaq's largest shareholder, has been putting pressure on management to maximise its cash flow. But anti-trust regulations limit the opportunities for Nasdaq to grow by acquisition in the US.
The LSE appeals to the New York exchange for two reasons. First, it has a virtual monopoly of equities trading in the UK, the world's second-most-active market. Second, it is the only exchange in Europe that can raise significant revenue from charging companies for listings, meaning that it has a stronger brand.
A merger might also help Nasdaq to win market share from the NYSE in the US.
It is a commonplace among exchange executives that "liquidity begets liquidity". With a deeper pool of liquidity from the addition of London-listed stocks, it would be easier to offer the most competitive prices on other Nasdaq and NYSE-listed stocks.
Some, however, were dubious about the strategic merits. Michael Pagano, a finance professor at Villanova University whose research has been used by Nasdaq in the past, suggested the integration could be difficult.
"There would be substantial investment needed in the short term there. It's not a win-win for both London and Nasdaq," he said.
"I don't see the benefit for traders of trading London and Nasdaq stocks side by side. London investors probably already have Nasdaq machines sitting on their desk in the City of London. Unless they extend the trading hours or something like that to expand the volume that way, I don't see the immediate benefit of having these two entities merge at this stage."
Mr Pagano added that the timing of the approach may have been influenced by the situation with Archipelago at the NYSE.
Additional reporting by Kate Burgess and Paul J Davies in London and Doug Cameron in Chicago
投资者看好两大股市“联姻”
若
纳斯达克(Nasdaq)与伦敦证券交易所(LSE)合并，那将使全球第二大证券市场和英国第一大交易所走到一起，创建一个极具流动性的市场。
分析师认为，两家交易所的联手将具有重大战略意义。
股票市场也认同这一交易。尽管纽约人士普遍认为，纳斯达克还需提高报价才能达成交易，但在纳斯达克并购意向和伦敦证交所拒绝其报价的消息公布后，纳斯达克股票数分钟内便上涨超过6%，至每股41.95美元。
伦敦证交所各大股东的反应同样积极，虽然他们也明确表明，他们希望提高报价。
投资公司Lindsell Train的一位基金经理尼克?特莱恩(Nick Train)说：“创建一家“无缝”的全球交易所代价很高，而伦敦证交所是最有可能成功的一家。任何一家着眼于未来的证交所都需要与伦敦证交所战略联盟，而且可能都想买下它。”伦敦证交所是特莱恩的投资组合中十大重仓股之一。
他还表示：“我已经放弃对该交易进行估值。作为一项并购交易，它很难估价。我只知道，如果你要建立一家全球性交易所，你就需要这块资产。作为(伦敦证交所的)股东，我希望不只得到现金，最好还有股票，后者可能带来很大价值。那样会更有吸引力。”
苏格兰寡妇投资伙伴有限公司(SWIP)的一位基金经理戴维?柯尔(David Keir)说：“我们注意到，报价正接近我们对这项业务的估值。长期以来我们一直表示，伦敦证交所是个有价值的机构。最新的这一结果证明了它的内在价值。我们期待与纳斯达克讨论它的报价，并继续与伦敦证交所进行对话。”
分析师相信这起交易具有战略和技术意义。金融服务咨询公司Celent 旗下证券与投资事业部经理哈赖尔?史密斯(Harrell Smith)说：“相比于伦敦证交所迄今所收到的其它任何报价，(纳斯达克的)这个可能更具战略意义。更重要的是，它比纽约证券交易所(NYSE)可能提出的报价更有意义。”
史密斯强调说，纳斯达克以其科技架构为自己取得了关键的战略优势，现在它的架构也已包括了去年从Instinet买下的平台。“若将这一技术运用到伦敦证交所，那将真正帮助后者大幅节省成本，”他说。
“纽约证交所拥有充沛的现金，这很明显，但它们无法带来同样的技术协同优势。”
几位证交所内部人士指出，将纳斯达克与伦敦证交所的平台结合在一起要相对容易些。他们也信赖纳斯达克首席执行官罗伯特?格雷菲尔德(Robert Greifeld)，认为这位受过训练的工程师将避免整合过程中的错误。对纽交所来说，技术更可能是个障碍。目前纽交所正向既包括传统大厅交易又包括电子交易的混合状态过渡。它的电子交易技术来自并购的Archipelago Holdings，后者本周已经停业。
对交易所而言，在一个交易平台上进行尽可能多的交易符合其经济利益。因此，在一个共同平台上，交易量的增加几乎会直接带来财务收益。
增加流动性最简单的途径，就是收购股票交易所。
美国和英国的股票市场发展成熟，效率很高。一旦技术进步实现了更快速交易，那么大幅增加交易量的唯一途径就是接纳更多的公司。
私人股本公司赫尔曼?弗雷德曼(Hellman & Friedman)是纳斯达克最大的股东，它一直在向管理层施压，要求最大化交易所的现金流。然而，反托拉斯监管规定限制了纳斯达克在美国通过并购发展的机会。
这个位于纽约的交易所看上伦敦证交所有两个原因：其一，伦敦证交所事实上垄断了英国的股票交易，而英国股市是全球第二位最活跃市场；其二，它是欧洲唯一一家能够通过对公司上市收费来获得大量收入的证交所，这意味着它有一个较强势的品牌。
若成功并购伦敦证交所，它还可能帮助纳斯达克在美国从纽交所手中赢得市场份额。
在交易所高管当中，“流动性带来流动性”乃是老生常谈的一句话。在伦敦证交所上市的公司加入后，纳斯达克的流动性将更好，它将更容易为纳斯达克其它上市公司和纽交所上市公司提供最具竞争力的上市价格。
但有人对这一交易的战略价值持有疑议。维拉诺瓦大学(Villanova University)金融学教授迈克尔?派格诺(Michael Pagano)暗示，双方的整合可能比较难。纳斯达克过去曾使用过迈克尔教授的研究成果。
他说：“短期内将需要大量投资。对伦敦证交所和纳斯达克来说，这不是桩双赢的交易。”
“对于同时买卖伦敦证交所和纳斯达克股票的交易者来说，我看不出这笔交易有何好处。伦敦投资者可能已在其金融城办公室装有纳斯达克终端机。除非他们延长交易时间或采取类似措施，以同样的方式来扩大交易量，否则我看不出两家交易所在目前合并有什么直接好处。”
派格诺还表示，双方的并购时机可能受到了纽交所收购Archipelago的影响。
凯特?伯吉斯(Kate Burgess)、保罗?J?戴维斯(Paul J Davies)伦敦、道格?卡梅伦(Doug Cameron)芝加哥补充报道。
