LONDON - Senior executives at Nasdaq, the US stock market, have spent the weekend locked in discussions over whether they should launch a campaign of opposition against the deal between the London Stock Exchange and Borsa Italiana.
Nasdaq, which has a 30 per cent stake in the LSEfollowing its attempt earlier this year to take it over, would need the support of other shareholders to prevent the deal from going ahead.
However, it has a number of concerns which could prompt a campaign againstthe LSE's takeover of Borsa Italiana.
Most significantly, since the agreed offer for Borsa Italiana would see the Italians paid in the form of LSE shares, Nasdaq's stake would be reduced to 22 per cent of the combined company.
That could make it harder for the US exchange to launch a new attack on the LSE next year, when takeover regulations will allow it to do so.
Advisers to the LSE are well aware of the potential for conflict with Nasdaq and sought legal advice at an early stage of their talks with Borsa Italiana.
They have been advised that the deal will require clearance from only 50 per cent of shareholders, not the higher 75 per cent hurdle rate reserved for deals that require companies to rewrite their memoranda of understanding.
However, insiders at the LSE remain concerned that Nasdaq may seek a fight.
"The big question is whether it will behave in an economically rational way, because this is a very good deal for shareholders," said one.
Nasdaq is understood to be considering all its options, including selling its stake in the LSE, on which it has made a handsome paper profit this year.
Another alternative for Nasdaq is to hold fire on going public with its views on the deal until the position of NYSE Euronext, the world's largest stock exchange, becomes clearer.
Earlier this year, Borsa Italiana turned down overtures from Euronext which were expected to lead to a formal offer valuing the Italian exchange at more than the 1.63bn pounds agreed with the LSE.
However, Euronext is thought to be reluctant to launch a counter-bid for Borsa Italiana without a recommendation from the Italian exchange's board.
