London Stock Exchange

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London Stock Exchange <tr><td colspan="2" style="text-align:center; padding:16px 0 16px 0;">Image:LSE logo.png</td></tr>
Type	Public (LSE: LSE)
Founded	1801
Headquarters	Image:Flag of the United Kingdom.svg London, England, UK <tr><th style="text-align:right; padding-right:0.75em;">Key people</th><td>Clara Furse, CEO Christopher S. Gibson-Smith, Chairman</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Industry</th><td>Financial</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Products</th><td>Stocks</td></tr><tr><th style="text-align:right; padding-right:0.75em;">Slogan</th><td>Dictum meum pactum, "My word is my bond".<ref>A piece of trivia: Upon occasion, financial companies will decide to use this motto. They only know the English "My word is my bond"; and, due to the difficulty of locating the original Latin motto (from which the English version is taken), produce a fake coat of arms for their business embellished with the Latin motto verbum meum pactum. At first sight, this seems O.K. -- for this Latin motto also means "My word is my bond" -- but, sadly for them, whilst dictum meum pactum very definitely means "The words that come out of my mouth are my bond", the contrasting motto verbum meum pactum, in this context, means "The words that I write on a page are my bond"; and, as a consequence, they are warning their customers that "Nothing that I say can be trusted".</ref></td></tr><tr><th style="text-align:right; padding-right:0.75em;">Website</th><td>londonstockexchange.com</td></tr>

Image:Paternoster Square.jpg

The London Stock Exchange (LSE) is a stock exchange located in London, England. Founded in 1801, it is one of the largest stock exchanges in the world, with many overseas listings as well as UK companies.

[edit] History

It traces its history to 1698 when the stock brokers were expelled from the Royal Exchange and John Castaing, stationed at an office in Jonathan's Coffee-House, published the prices of stocks and commodities called The Course of the Exchange and other things.

The former Stock Exchange Tower, based in Threadneedle Street/Old Broad Street was opened by Queen Elizabeth II in 1972 and housed the Trading Floor where traders would traditionally meet to conduct business. This became largely redundant with the advent of the Big Bang on 27 October 1986, which deregulated many of the Stock Exchange's activities. It eliminated fixed commissions on security trades and allowed securities firms to act as brokers and dealers. It also enabled an increased use of computerised systems that allowed dealing rooms to take precedence over face to face trading.

On July 20, 1990 a bomb planted by the IRA exploded in the men's toilets behind the visitors' gallery. The area had already been evacuated and nobody was injured.<ref name="bbc_0720_on_this_day">"On This Day: July 20, 1990: IRA bombs Stock Exchange", BBC News.</ref> The long term trend towards electronic trading had been reducing the Exchange's status as a visitor attraction and although the gallery reopened it was closed permanently in 1992.

In July 2004 the London Stock Exchange moved from Threadneedle Street to Paternoster Square (EC4) close to St Paul's Cathedral, still within the "Square Mile" (the City of London). It was officially opened by Queen Elizabeth II once again, accompanied by The Duke of Edinburgh, on 27 July 2004. The new building contains a specially commissioned dynamic sculpture called "The Source", by artists Greyworld.

[edit] Pursuit of LSE by prospective merger partners

In December of 2005, the London Stock Exchange rejected a £1.6 billion takeover offer from Macquarie Bank. The LSE described the offer as "derisory." It then received a bid in March of 2006 for £2.4 billion from NASDAQ, which was also rejected by the LSE. NASDAQ later pulled its bid, and less than two weeks later on April 11, 2006, struck a deal with LSE's largest shareholder, Ameriprise Financial's Threadneedle Asset Management unit, to acquire all of that firm's stake, consisting of 35.4 million shares, at £11.75 per share.<ref name="wsj_20060411_nasdaq_stake">Patrick, M., Lucchetti, A., Reilly, D., Taylor, E.. "Nasdaq Acquires 15% of LSE", The Wall Street Journal, 2006-04-11.</ref> NASDAQ also purchased 2.69 million additional shares, resulting in a total stake of 15%. While the seller of those shares was undisclosed, it occurred simultaneously with a sale by Scottish Widows of 2.69 million shares.<ref name="forbes_nasdaq_sw_20060412">"Scottish Widows says has sold 2.7 mln LSE shares at 1,175 pence", Forbes, 2006-04-12.</ref> The move was seen as an effort to force LSE to negotiate either a partnership or eventual merger, as well as to block other suitors such as NYSE.<ref name="bbg_nasdaq_stake">Ortega, E.. "Nasdaq Buys 15 Percent Stake in LSE for $782 Million", Bloomberg News, 2006-04-11.</ref> Subsequent purchases increased NASDAQ's stake to 25.1%, holding off competing bids for several months.<ref name="wsj_20060404">MacDonald, A., Lucchetti, A.. "In LSE Stakes, Nasdaq Advances, Euronext Falls", The Wall Street Journal, 2006-05-04.</ref><ref name="wsj_20060411">Lucchetti, A., MacDonald, A.. "Nasdaq Lifts Its LSE Stake to 24%", The Wall Street Journal, 2006-05-11.</ref><ref name=""reu_20060519">"Nasdaq raises LSE stake, making rival bids harder." Goldsmith, B. and Elliott, M. Reuters. May 19, 2006.</ref> United Kingdom financial rules required that NASDAQ wait for a period of time before renewing its effort. On November 20, 2006, within a month or two of the expiration of this period, NASDAQ increased its stake to 28.75% and relaunched a formal tender offer at the minimum permitted bid of £12.43 per share, which was the highest NASDAQ had paid on the open market for its existing shares.<ref name="wsj_20061120">Lucchetti, A., MacDonald, A.. "Nasdaq Makes Bid to Buy Rest of London Stock Exchange", The Wall Street Journal, 2006-11-20.</ref> On prior occasions, NASDAQ had been spurned by LSE chief Clara Furse, and this time elected to go directly to the board of the London exchange. LSE's options had diminished by this time as two of the three most likely competing bidders, NYSE Group and Euronext, were close to finalizing their own merger, while Deutsche Börse, the third, had dropped out of the contest.<ref name="wsj_20061120" /> The LSE immediately rejected this bid, stating that it "substantially undervalues" the company.<ref name="bbc_20061120_reject">"LSE rejects £2.7bn Nasdaq offer", BBC News, 2006-11-20.</ref>

[edit] Structure

The LSE is broken down into the Main Market and Alternative Investments Market (AIM), as well as EDX London (which handles derivatives). The independent FTSE Group maintains a series of indices for measuring the LSE, including the FTSE 100 Index, FTSE 250 Index, and FTSE 350 Index.