London Stock Exchange - Statement re: Approach

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

10 March 2006

STATEMENT RE: APPROACH

The Board of London Stock Exchange (the “Company”) announces that it has received a pre-conditional proposal from The Nasdaq Stock Market, Inc. ("NASDAQ”) with a view to NASDAQ making an offer to acquire the Company for 950p per share in cash.

The Board of London Stock Exchange firmly believes that the proposal, which represents only a 8 per cent premium to the current market price, substantially undervalues the Company, its unique position and the very significant synergies that would be achievable from the combination of London Stock Exchange with any major exchange group.

During its defence against the recent offer from Macquarie, the Company demonstrated that it has extremely strong growth prospects, which have been reinforced by record levels of trading on SETS in the first two months of the calendar year. February accounted for nine of the twenty busiest trading days ever on SETS with the average daily value traded up 43 per cent to £5.8 billion and the average daily number of trades up 35 per cent to 266,577 – both new records.

Accordingly, the Board of London Stock Exchange has rejected this unsolicited approach and intends to continue with its proposed 200 pence per share capital return, announced on 17 February 2006, which is subject to approval by London Stock Exchange’s shareholders at a meeting to be held on 19 April 2006.

For further information, please contact:

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

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

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

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

Merrill Lynch International, which is regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to London Stock Exchange in relation to the matters referred to in this announcement and no one else and will not be responsible to anyone other than London Stock Exchange for providing the protections offered to clients of Merrill Lynch International nor for providing advice in relation to the matters referred to in this announcement

Lehman Brothers Europe Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to London Stock Exchange in relation to the matters referred to in this announcement and no one else and will not be responsible to anyone other than London Stock Exchange for providing the protections offered to clients of Lehman Brothers Europe Limited nor for providing advice in relation to the matters referred to in this announcement

This announcement is not made with the approval of NASDAQ. There can be no certainty that any offer will be made nor as to the terms on which any offer might be made.

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