The Swedish OM Group, which launched a takeover bid for the London Stock Exchange, said on Tuesday that just one percent of LSE shareholders had accepted its offer and that it was extending the bid deadline for a further three weeks.
The small technology group, which shocked London financial circles with its daring raid in August, said it was now giving LSE shareholders until October 23 to accept its bid, which valued the venerable exchange at 820 million pounds (1.4 billion euros, $1.2 billion).
OM chairman Per Larsson insisted that the low acceptance rate hitherto was not a setback, claiming to have made "good progress" in convincing LSE shareholders of the merits of the Swedish takeover bid.
"When we launched our offer for LSE, we knew that the issues were complex, therefore we did not anticipate significant acceptances at this stage," Larsson said in a statement.
He stressed that the offer from OM, which also runs the Swedish bourse, was gaining recognition "as the only opportunity to transform LSE, its technology, its management and its service levels."
The Swedish bid has met with a strong rebuttal from LSE executives, who have repeatedly derided OM's overtures as inadequate.
But the takeover raid has scuttled LSE's controversial plans to merge with Frankfurt's Deutsche Boerse, which would have created the iX international exchanges.
Some LSE shareholders already had reservations about throwing in their lot with the newer Deutsche Boerse, and problems quickly emerged over a host of issues, from settlement and clearing to regulation and division of business.
Many LSE members rejected the idea of a 50-50 link-up, arguing that London, as the world's third-largest market, should have led from the front.
OM argued that all those issues could have be avoided if LSE shareholders opted to throw in their lot with the small Swedish systems company.
OM's bid has prompted intense market speculation of a rash of counterbids, possibly involving as diverse players as Paris-Brussels-Amsterdam superbourse Euronext, British information group Reuters and iX partner Nasdaq.
Observers here have increasingly wondered whether it really matters who runs the LSE, as long as it can provide the biggest pool of liquidity -- offering investors the best prices on the widest range of international assets.
The market itself has continued to trade regardless, and on Tuesday the exchange's leading index, the FTSE-100, opened with a modest 0.6-percent gain to stand at 6,321.4 points in early trading. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)