The Nasdaq Stock Market has dropped its planned £2.4-billion bid for the London Stock Exchange (LSE), it said today.
But the US exchange left the door open to a tie-up in the future, saying it might make an offer under one of a series of circumstances, such as if the London Stock Exchange agreed to a deal or a rival bidder emerged.
LSE shares were down 8.75 per cent at 1,022 pence in opening trade. But analysts said the fall was likely to be cushioned by speculation that the exchange, which has been courted by a string of suitors over the past 15 months, would eventually succumb to a bid.
An industry source said Nasdaq, which was seeking to create the world's first major trans-Atlantic stock exchange, had been deterred by a big rise in the LSE's share price since its 950-pence-a-share proposal was announced earlier this month.
LSE shares have soared to as high as 1,219-1/2p since Nasdaq's approach was announced, and rejected, on hopes the US exchange might improve its proposal or that a rival suitor, such as the New York Stock Exchange, might enter the fray.
LSE has long been considered a bid target after earlier rounds of industry consolidation. Deutsche Boerse, transnational European exchange Euronext and Australia's Macquarie Bank have all expressed an interest in a deal over the past 15 months.