Press releases 2006

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA OR CANADA

Shareholder Circular

19 December 2006

The Board of London Stock Exchange Group plc (“the Exchange Group”) is today posting its shareholder circular (the “Circular”) in response to the final offer posted by Nasdaq on 12 December 2006*. As stated in the Exchange Group’s announcements on 20 November and 12 December 2006, the Board unanimously rejects Nasdaq’s wholly inadequate offer as it substantially undervalues the Exchange Group and fails to reflect the unique strategic position and the powerful earnings and operational momentum of the business.

The Circular highlights the Exchange Group’s position at the centre of the globalisation of capital markets, the exceptional resilience and quality of the business and its ability to compete successfully in a fertile environment for highly efficient listing and trading platforms.

The Circular includes the Exchange Group’s forecast for adjusted basic earnings per share for the 12 months to 31 December 2006 which is expected to be not less than 50.4 pence per share, an increase of no less than 58 per cent. The Board also announces its intention to recommend a FY 2007 final dividend of not less than 12 pence per share, bringing the total dividend for FY 2007 to at least 18 pence per share, an increase of at least 50 per cent compared to FY 2006.

The Board highlights that Nasdaq’s final offer is the lowest price Nasdaq can currently offer under the Takeover Code. The offer values the Exchange Group at a multiple of 24.7x adjusted basic EPS for the 12 months to 31 December 2006, lower than the multiple of 29.8x adjusted earnings for the 12 months to 31 December 2005 from Nasdaq’s withdrawn proposal in March 2006. Nasdaq’s final offer is also lower than the trading multiple for Euronext N.V. of 30.1x for the 12 months to 31 December 2006.

Consequently, the Board of the Exchange Group strongly recommends that Exchange Group shareholders reject Nasdaq’s wholly inadequate offer and take no action in respect of their shareholdings.

Chris Gibson-Smith, Chairman of the Exchange Group, commented:

“Over the last twelve months, records have tumbled in terms of money raised as well as the volume and value of trading on our markets. This is further confirmation of the significant progress we are making towards the realisation of our vision to be ‘the world’s capital market’. For the second time this year, Nasdaq is offering a wholly inadequate price for the company and shareholders should reject the offer.”

For further information, please contact:

London Stock Exchange Group plc

John Wallace - Media +44 (0)20 7797 1222
Paul Froud - Investor Relations +44 (0)20 7797 3322

Merrill Lynch +44 (0)20 7628 1000
Matthew Greenburgh
Richard Slimmon

Lehman Brothers +44 (0) 20 7102 1000
Anthony Fry
Stephen Fox

Finsbury +44 (0)20 7251 3801
James Murgatroyd
Simon Moyse

* The offer has been made by Nightingale Acquisition Limited, a wholly owned subsidiary of The Nasdaq Stock Market, Inc. (“Nasdaq”). Nasdaq has defined “final” in its offer document as meaning that its offer will not be revised except: (i) upon the recommendation of London Stock Exchange Group plc Board; or (ii) if a firm intention to make a competing offer for London Stock Exchange Group plc is announced, whether or not subject to preconditions.

A copy of the Exchange Group’s Circular responding to Nasdaq’s offer is available on: http://www.londonstockexchange-ir.com/lse/bid/