Press releases 2000
29 August 2000
REJECTION OF OFFER FROM OM GRUPPEN
The Board of the London Stock Exchange ("LSE") notes the announcement this morning of an offer by OM Gruppen AB ("OM") for the LSE. Today's offer by OM is in line with their original approach last Thursday which the LSE Board had no hesitation in rejecting.
The Board of LSE believes that OM's offer represents wholly inadequate value for shareholders and constitutes an inferior business proposition to the proposed merger with Deutsche Brse to create iX-international exchanges.
- The offer of OM shares and 7 in cash per LSE share significantly undervalues LSE. The LSE's closing share price was 23.50 on Friday 25 August.
- The strategic rationale for the creation of iX is to create a growth-oriented, cost-efficient market leader in European capital markets. A combination with OM achieves far less for LSE's customers and shareholders in this regard.
The Board will write to shareholders setting out their detailed reasons for rejecting this offer following publication of OM's offer document. In the meantime, shareholders are advised to take no action.
In light of OM's offer announced today, the Board of LSE has decided to adjourn the Scheme and Extraordinary General Meetings scheduled for 14 September.
Don Cruickshank, Chairman of LSE, said today: "Under this offer, our shareholders would receive an ongoing interest of only 18.5% in OM - with highly rated paper which is trading at four times the level of a year ago - and 7 per share in cash. This offer is derisory; it fundamentally undervalues our business and its prospects.
"While OM recognises our market position and brand strength, their offer does little to advance our strategic goals in Europe. Our customers want European consolidation, which we believe is the best way to deliver value to our shareholders."
Schroder Salomon Smith Barney and Merrill Lynch, which are regulated in the United Kingdom by The Securities and Futures Authority Limited, are acting for London Stock Exchange plc and no one else in connection with the offer by OM and will not be responsible to anyone other than London Stock Exchange plc for providing the protections afforded to their respective customers or for providing advice in relation to the offer.