The London Stock Exchange is worth far more to the UK than the total value of its shares. For the City to remain one of the key financial hubs of the world it needs the LSE to be efficient and frankly it needs it to be the top European exchange.

The question is, can Australian investment bank, Macquarie, which has interests in toll roads, wind farms and shopping malls but never ran a stock exchange, possibly be the right purchaser?

Those who have the power to decide the LSE’s fate have a good reason to make certain that its future is secure. Most of the LSE’s shareholders work in the City; their livelihood is dependent on the stock exchange. So this purchase really is about more than the price the bidder is willing to pay.

Round one is over. Macquarie offered $2.7 billion takeover last week, and was turned away with a flea in its ear. With the LSE saying of the offer that it was ‘derisory’ and lacking in ‘any strategic or commercial credibility.’

In total Macquarie offered 580p a share, yet after the offer was made LSE’s main shareholder, Threadneedle Asset Management, bought shares at 615p a go. Why would it do that? Unless it is either trying to resist the purchase or expects the price to go much higher.

Macquarie, which was once owned by British merchant bank Hill Samuel & Co until it was spun off in the mid ’80s, will be back. This time it’s thought the bid will top $3bn.

But it’s by no means certain the LSE will be heading for ownership from down under. Also waiting in the wings is Euronext, which owns Paris, Brussels, Amsterdam, and Lisbon stock exchanges, as well as the London-based International Derivatives Market, and Deutsche Börse, the German exchange.

Meanwhile, the LSE’s chief executive, Clara Furse, is still harbouring hopes of continued independence.

© Investment & Business News 2013