Offer Rejection

London Stock Exchange Plc
17 February 2006

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

                            17 February 2006

                          Shareholder Circular

The Board of London Stock Exchange plc is today posting a shareholder circular
("circular") in response to Macquarie's offer.  The circular summarises the
Exchange's forecasts for strong SETS growth with the average number of trades
per day expected to grow by at least 100 per cent by financial year 2008,
underlining structural changes in the pattern of equity trading, and also
outlines a number of value enhancements. These include:

•     doubling the previously announced capital return to £510 million - 200p
      per share;
•     commencing a share buyback programme of up to £50 million per annum
      following the capital return; and
•     raising the total FY 2006 dividend 71 per cent to 12p.

The Circular also provides details of cost efficiencies following a period of
continuing investment in infrastructure and technology.


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

"The London Stock Exchange has a unique strategic position and an exceptional
customer franchise.  Our continued strong trading performance is delivering
excellent financial results, which enables us to announce an increased capital
return and significantly increased dividend.  Macquarie's offer recognises none
of this.  It provides no value today and reflects no value tomorrow.
Shareholders should continue to reject the offer."

The Board believes that the current share price does not fully reflect the
stand-alone value of the Exchange given its established performance, let alone
its prospects and the fact that its P/E multiple remains at a discount to its
listed peers. The Board's primary objective is to deliver superior shareholder
returns from current share price levels. The Board is confident of achieving
this objective.

The Directors of London Stock Exchange plc, who have been so advised by Merrill
Lynch and Lehman Brothers, strongly recommend that Exchange shareholders
continue to reject Macquarie's ill-considered offer.

For further information:


London Stock Exchange         John Wallace - Media                020 7797 1222
                              Paul Froud - Investor Relations     020 7797 3322
                              Lyndal Kennedy - Investor Relations 020 7797 3322

Merrill Lynch                 Matthew Greenburgh                  020 7628 1000
                              Richard Slimmon

Lehman Brothers               Anthony Fry                         020 7102 1000
                              Stephen Fox

Finsbury                      James Murgatroyd                    020 7251 3801
                              Simon Moyse

Today's circular and the London Stock Exchange's earlier shareholder circular of
January 19 responding to Macquarie's offer are available on: http://
www.londonstockexchange-ir.com/lse/bid/key/

Sources and bases:

The reference to the average number of trades per day by financial year 2008 is
relative to financial year 2005.

Implementation of the capital return is subject to London Stock Exchange no
longer being in an Offer Period and subject to shareholder and court approval.

The reference to P/E multiple is based on December 2005 calendarised P/E
multiples of major listed exchanges

The Directors of the London Stock Exchange accept responsibility for the
information contained in this announcement.  To the best of the knowledge and
belief of the Directors of the London Stock 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 London Stock
Exchange and no-one else in connection with the Offer and will not be
responsible to anyone other than the London Stock 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 London Stock
Exchange and no-one else in connection with the Offer and will not be
responsible to anyone other than the London Stock 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     
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