THE chances of the London Stock Exchange retaining its independence increased after Nasdaq, the New York stock market, walked away from its proposed £2.4 billion bid.

The offer was made earlier this month but was immediately rejected by the LSE, which has now seen off at least three suitors during the auction for the business that started in December 2004.

LSE shares dropped 76½p to £10.43½, still well ahead of the 950p a share that was on offer from Nasdaq. Analysts now hope that one of two potential bidders will emerge to make a firm bid. But one, Euronext, the operator of four continental exchanges, is under pressure to merge with another earlier bidder for the LSE, Deutsche Börse.

The second, the New York Stock Exchange, is known to be monitoring the situation. Sources close to the NYSE indicated last night that its strategists were still looking closely at the possibility of a bid but that nothing was likely to emerge in the short term.

It is understood that the newly listed New York exchange has identified many areas of synergy and opportunities for growth in a deal with its London rival. One source said: “International expansion is attractive. It’s all about access, it’s about growing the number of listings and cross- border product opportunities. There is strength in mass and volume.”

Nasdaq, whose chief executive, Bob Greifeld, was in London two weeks ago to discuss his approach with several of the LSE’s biggest shareholders, gave no reason for the withdrawal of its “indicative offer proposal”. Nasdaq has the right to come back if another party makes an offer for the LSE, but few observers think this likely.

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