Offer Rejection

London Stock Exchange Group PLC
23 January 2007





NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA OR CANADA



Statement re Nasdaq response document


23 January 2007


The Board of the London Stock Exchange Group plc (the 'Exchange') notes the
issue of Nasdaq's second circular today.  The Board continues to reject Nasdaq's
wholly inadequate offer.


The Board believes it is increasingly clear that Nasdaq's interests are not
aligned with those of other shareholders.  Nasdaq's self-serving criticism of
the Exchange's growth prospects underlines its obvious need to acquire it -
albeit on the cheap.  The document published by Nasdaq today is once again long
on rhetoric and short on valuation arguments.


Value


The Board of the Exchange wishes to emphasise the following facts:



•    The December 2006 PE multiples for Deutsche Boerse and Euronext are
     25.5x and 30.8x respectively compared to Nasdaq's offer for the Exchange of
     24.4x

•    The December 2007 PE multiples for Deutsche Boerse and Euronext are
     23.1x and 27.4x respectively compared to Nasdaq's offer for the Exchange of
     20.7x (as disclosed in Nasdaq's circular of 8 January 2007)


•   The December 2006 and 2007 average PE multiples for global exchanges
    are 40.0x and 31.4x respectively


•   Nasdaq continues to refuse to disclose the level of synergies that it
    expects to realise from a merger, which analysts have estimated at £49 
    million per year before tax


•  The December 2006 PE multiple of Nasdaq's offer of 24.4x is well below
   the 29.8x it offered in its withdrawn proposal for the Exchange in March 2006
   and the 30.0x offered to Euronext shareholders in its agreed merger with NYSE



Exchange performance



We are pleased that Nasdaq acknowledges the superiority of the Exchange's
performance in attracting new international listings.  Indeed, IPOs on AIM alone
raised a similar amount of new capital to that raised on the whole of Nasdaq in
2006.



The Board of the Exchange published a re-forecast of SETS trading for the 2008
financial year after considerable analysis and care.  The Exchange is
significantly exceeding the SETS targets issued in February 2006 and is
confident that it will achieve the revised target of at least 480,000 average
trades per day.  Indeed, as set out in our circular of 18 January 2007,
shareholders should note that in the first 10 trading days of this month, SETS
has achieved an all time trading record and has averaged almost 400,000 trades
per day.



While Nasdaq acknowledges that the Exchange has achieved growth in its Broker
Services business, Nasdaq has, in five of the last six months, lost market share
in trading of its own listed securities.



Nasdaq's statement on discussions is incorrect



At no stage has Nasdaq attempted to pursue any constructive discussion with the
Exchange.  In November 2006, it simply made public a second unsolicited approach
- this time at an even lower multiple than its previous approach.  Since
announcing its offer, Nasdaq has made no attempt to contact the Exchange.  As
Nasdaq continues to offer entirely the wrong price, the Board of the Exchange
has been forced to conclude that it is not in shareholders' interests to engage
with Nasdaq. The Board continues to explore opportunities that would expedite
the full realisation of its vision to be the world's capital market and deliver
increasing value to shareholders



Clara Furse, Chief Executive Officer of the Exchange, commented:



'The Exchange's trading growth has exceeded that of all major listed equity and
derivatives exchanges in Europe and the United States.  Nasdaq's approach is
clearly intended to undermine the perception of the true value of the London
Stock Exchange.  Our shareholders deserve more.'



Chris Gibson-Smith, Chairman of the Exchange, commented:

'The Board firmly believes that Nasdaq's offer does not even give standalone
value.  The Board will continue to defend steadfastly shareholders' interests
and we await any indication from Nasdaq regarding an offer price that the Board
could recommend to shareholders.  It is time for Nasdaq to shut up or put up.'



For further information, please contact:
London Stock Exchange Group plc
John Wallace - Media    020 7797 1222
Paul Froud - Investor Relations 020 7797 3322


Merrill Lynch                        020 7628 1000
Matthew Greenburgh
Richard Slimmon


Lehman Brothers                  020 7102 1000
Anthony Fry
Stephen Fox


Finsbury
James Murgatroyd        020 7251 3801
Simon Moyse



* The offer has been made by Nightingale Acquisition Limited, a wholly owned
subsidiary of The Nasdaq Stock Market, Inc. ('Nasdaq'). Nasdaq has defined '
final' in its offer document as meaning that its offer will not be revised
except: (i) upon the recommendation of London Stock Exchange Group plc Board; or
(ii) if a firm intention to make a competing offer for London Stock Exchange
Group plc is announced, whether or not subject to preconditions. Nasdaq has also
announced on 18 January 2007 that after midnight (London time) on Saturday 27
January 2007, Nasdaq's final offer will not be revised upon the recommendation
of the Board of the Exchange.



Sources and bases:



- Closing prices from Factset, consensus earnings estimates from Reuters and
exchange rates are as at the close of market on 22 January 2007



- Nasdaq's offer multiple of 24.4x is calculated as Nasdaq's offer price of
1,243 pence per ordinary share divided by the Exchange's adjusted basic earnings
per share for the 12 months to 31 December 2006



- The December 2006 and 2007 average PE multiples for global exchanges refers to
the straight average for the peer group used on page 14 of the Exchange's
circular dated 18 January 2007 excluding the Exchange and the Nasdaq offer
multiple



- The synergies figure of £49 million is sourced from page 15 of the Exchange's
circular dated 18 January 2007



- The 29.8x multiple offered in Nasdaq's withdrawn proposal is sourced from the
Nasdaq press release of 10 March 2006



- The multiple of 30.0x offered to Euronext shareholders is calculated as
described in the Exchange's shareholder circular dated 18 January 2007 but with
the NYSE share price and €:$ exchange rate updated as at 22 January 2007



- Money raised by IPOs on AIM for 2006 totals $17.3 billion and is sourced from
the Exchange's AIM Market Fact Sheets (and, for comparative purposes, the
figures have been converted into US dollars at the relevant average monthly
exchange rates for 2006 sourced from Bloomberg). Money raised on Nasdaq totals
$18.4 billion and is sourced from Nasdaq's press release of 12 January 2007
titled 'Nasdaq Announces Quarterly New Listings Statistics'



- The reference to all major listed exchanges in Europe and US refers to listed
equity and equity derivatives exchanges with a market capitalisation of greater
than £1 billion as at 15 December 2006 and their derivatives subsidiaries.  The
reference to trading growth and trading information on equity exchanges refers
to growth in number of order book trades in own listed stocks for the three
largest European exchanges and all trades in own listed stocks for major US
exchanges. Trading information for derivative exchanges refers to growth in
number of contracts traded. Information for the Exchange is sourced from the
Exchange's Secondary Market Fact Sheets. Information for Euronext and Deutsche
Boerse is sourced from the Federation of European Securities Exchanges website.
All other information is sourced from the websites of the relevant exchange.



The Directors of the Exchange accept responsibility for the information
contained in this announcement. To the best of the knowledge and belief of the
Directors of the Exchange (who have taken all reasonable care to ensure that
such is the case), the information contained in this announcement for which they
accept responsibility is in accordance with the facts and does not omit anything
likely to affect the import of such information.

Merrill Lynch International, which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for the Exchange and no-one
else in connection with the offer and will not be responsible to anyone other
than the Exchange for providing the protections afforded to clients of Merrill
Lynch International nor for providing advice in relation to the offer.

Lehman Brothers Europe Limited, which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for the Exchange and no-one
else in connection with the offer and will not be responsible to anyone other
than the Exchange for providing the protections afforded to clients of Lehman
Brothers Europe Limited nor for providing advice in relation to the offer.




                      This information is provided by RNS
            The company news service from the London Stock Exchange