A&O, Bakers and Cahill join Nasdaq attack on LSE

Nasdaq has enlisted Allen & Overy and Cahill Gordon & Reindel is advising the banks on Nasdaq’s unwelcome bid for the London Stock Exchange (LSE).

As with the original bid back in March, Freshfields Bruckhaus Deringer is advising the LSE, with corporate partner David Higgins and co-head of financial institutions Graham Nicholson leading the team.

They are facing corporate partners Michael Hatchard and Eric Friedman in a transatlantic Skadden Arps Slate Meagher & Flom team representing longstanding client Nasdaq.

Skadden is joined by both A&O and Cahill in mounting its £2.7bn bid, which was rejected yesterday by the LSE. The LSE said that Nasdaq had substantially undervalued the exchange. Although Nasdaq cannot increase its offer, it has pledged to pitch directly to the LSE’s shareholders.

Corporate partners Alan Paul and Ian Lopez are leading A&O’s team.

Cahill is representing Bank of America and Dresdner Kleinwort Securities in financing the Nasdaq bid, which is comprised of $3.32bn (£1.74bn) of credit agreements, a $1.75bn (£920m) bridge loan and $775m (£407m) purchase of preferred stock from Nasdaq. The Cahill team is led by banking partners Jim Clark and Luis Penalver.

Nasdaq’s financial adviser is Greenhill, represented by Baker & McKenzie with a team headed by corporate partner Helen Bradley.

Last week, news that seven banks intended to mount a rival trading platform to the LSE sent the bourse’s shares plummeting as much as 125 pence, or 9.6 percent, to 1,183 pence, the biggest decline since March 2 5. This fall triggered fears that Nasdaq would take a run at the LSE as its compulsory waiting period had also ended.

Under UK takeover rules, Nasdaq had to endure a six-month cooling-off period since its offer of 950p a share was rejected in March. Unperturbed, Nasdaq withdrew its offer and continued to amass a stake of over 25 per cent in the LSE.

Since making its offer on Monday, Nasdaq bought another seven million shares, raising its stake to 28.75 per cent of LSE shares.

This is important because Nasdaq could potentially block a third-party offer for the London bourse.

Now that Ashurst client Deutsche Boerse has bowed out of running for Euronext, a Slaughter and May client, it looks likely that Nasdaq’s archrival and Wachtell Lipton Rosen & Katz client the New York Stock Exchange will make a move for Euronext.

With movement in Europe and a rival trading platform in the pipeline, it is eminently possible that the LSE may soon have another suitor.