Final Cash Offers of 1,243 Pence Per Ordinary Share and 200 Pence Per B Share by Nightingale Acquisition Limited for the Entire Issued and to be Issued Share Capital of London Stock Exchange Group plc

Nov 20, 2006

Final Cash Offers of 1,243 Pence Per Ordinary Share and 200 Pence Per B Share (Plus an Amount Equal to the Accrued Dividend) by Nightingale Acquisition Limited (a Wholly Owned Subsidiary of the Nasdaq Stock Market, Inc.) for the Entire Issued and to be Is 11 KB

NEW YORK, Nov 20, 2006 (PrimeZone Media Network via COMTEX News Network) -- The Board of The Nasdaq Stock Market, Inc. ("NASDAQ") today announces the terms of Final Offers (see NOTE below) to be made by Nightingale Acquisition Limited ("NAL"), a wholly owned subsidiary of NASDAQ, for the entire issued and to be issued share capital of London Stock Exchange Group plc ("LSE"). The Ordinary Offer is in cash at 1,243 pence per LSE Ordinary Share, valuing the entire issued ordinary share capital of LSE at approximately GBP 2.7 billion and represents an enterprise value of approximately GBP 2.9 billion (based on LSE's net debt of GBP 284.7 million as at 30 September 2006). The B Share Offer is in cash at 200 pence per LSE B Share (plus an amount equal to the accrued dividend), valuing the entire issued B share capital of LSE at approximately GBP 16.5 million.

NASDAQ is today making this announcement to ensure that all market participants are properly informed of the details of its Final Offers. NASDAQ has requested a meeting with LSE's Chairman to seek a recommendation of the Final Offers in advance of posting the Offer Document (which will be undertaken as soon as possible).

Highlights

An attractive offer which fully reflects both LSE's standalone prospects and an appropriate premium



 -   NASDAQ appreciates LSE's strong standalone growth prospects. In
     particular, NASDAQ recognises the strong growth in SETS volumes
     of 56 per cent. year-on-year for the six months to September
     2006, the strong new issue activity currently being experienced
     and the growth in related activities

 -   This potential needs to be set against the fact that LSE's share
     price has risen 216 per cent. over the past two years and 103 per
     cent. over the past year vs. net income growth of 75 per cent.
     and 50 per cent. respectively. NASDAQ believes this potential, as
     well as the significant synergy benefits of a combination, are
     fully reflected in its offer price

 -   An offer price of 1,243 pence per LSE Ordinary Share represents:

     --   a 54 per cent. premium over the Closing Price on 10 March
          2006, the Business Day immediately prior to LSE's
          announcement that it had received a pre-conditional approach
          from NASDAQ, adjusted for the LSE Capital Return;

     --   a 40 per cent. premium to NASDAQ's indicative offer price of
          9 March 2006 as adjusted for the LSE Capital Return; and

     --   a multiple of 27.9x adjusted earnings for the 12 months to
          31 March 2006 and a multiple of 24.9x consensus earnings
          forecast for the 12 months to 31 March 2007

 -   NASDAQ will today submit a filing to the OFT in relation to the
     Transaction and does not expect the Transaction to give rise to
     any significant antitrust issues

 -   The Transaction is not subject to any other formal regulatory
     approvals nor does it require NASDAQ shareholder approval

 -   The Transaction is expected to complete in the first quarter of
     2007

 -   The Final Offers will not be revised except that NAL reserves the
     right to revise the Final Offers: (i) upon the recommendation of
     the LSE Board; or (ii) if a firm intention to make a competing
     offer for LSE is announced, whether or not subject to any
     preconditions

Overview of transaction rationale

NASDAQ and LSE are both pre-eminent equity markets in their respective countries. NASDAQ believes that bringing together the two organisations would present listed companies, traders and investors with a leading global equity market place, based on dynamic industry leadership. A transaction presents the potential to create:



 -   the leading global, cross-border equity market platform giving
     issuers the ability to dual-list simultaneously in London and New
     York;

 -   the leading global exchange by number of listings featuring over
     6,400 listed companies with a total market capitalisation of
     approximately GBP 6.3 trillion ($11.8 trillion) presenting a
     strong platform for companies of all sizes and the natural choice
     for international issuers;

 -   the most active global equity exchange, with an average daily
     volume of 7.4 billion shares traded, 5.5 million average daily
     bargains and an average daily value traded of approximately
     GBP 41.5 billion ($75.6 billion);

 -   significant efficiencies which would benefit the users of both
     platforms, and fully execute on the efficiencies that both
     companies offer their market participants; and

 -   a combined entity well positioned to lead further consolidation
     and compete effectively with any transatlantic or European
     combination.

 A proposal that will yield benefits to all users of LSE

 -   The combined entity will have the ability to offer a broad choice
     of efficient capital raising solutions to companies at multiple
     stages of development, from private and early stage firms via AIM
     and Portal, to large IPOs on the respective main markets. Listed
     firms across all market segments from AIM to Global Select will
     benefit from leveraging the technology and operational expertise
     of both businesses

 -   NASDAQ's transaction speeds are amongst the fastest in the
     industry (delivering sub-millisecond executions within the
     matching engine) and its infrastructure has the capacity to
     process approximately 10 times the current daily average volume
     of 2.0 billion shares traded. NASDAQ will work from its track
     record of combining systems efficiently and fairly to deliver
     leading technologies in order to further drive the performance,
     security and reliability of LSE's markets

 -   NASDAQ has an established track record of reducing operational
     costs while simultaneously improving the customer experience.
     NASDAQ has reduced average execution fees by 55 per cent. since
     2002. NASDAQ believes one of its primary responsibilities is to
     reduce the total cost of trading for market users whilst
     providing superior trading capabilities with a focus on client
     needs. As a demonstration of this focus, NASDAQ commits not to
     increase standard broker-dealer tariffs for at least three years.
     Additionally, NASDAQ will leverage its experience in service
     improvement, price leadership and product expansion for the
     benefit of the London market and will always be prepared to
     compete creatively and aggressively for broker-dealer business

 -   NASDAQ has demonstrated its belief that it must improve both the
     trading experience and the "listing service" to remain
     competitive. In a highly competitive domestic market, NASDAQ has
     a 99 per cent. retention record with listed companies since 2001
     and has broadened its range of support services geared to help
     companies improve and leverage their public company status.
     NASDAQ has achieved this through both organic expansion and
     acquisition. It will look to broaden the range of products
     offered to both issuers and data users in the London market in
     co-operation with LSE's existing product set

 -   Over the medium term, NASDAQ expects that a combination with LSE
     will bring substantial visibility and liquidity benefits to both
     issuers and investors. Subject to regulatory parameters,
     investors may also benefit from an increased potential for
     portfolio diversification. Enhanced access of US investors to LSE
     listed stocks and of UK investors to NASDAQ listed stocks should
     lead to an increase in trading activity and liquidity, reducing
     the cost of capital for issuers

 -   The two strong, yet distinct, brands of LSE and NASDAQ will
     together yield stronger competitive benefits to both the London
     and the New York financial centres

 Continuity of LSE's market structure

 -   NASDAQ respects the strengths of the London market and intends
     that LSE's operations should continue in a manner consistent with
     current practice

 -   The existing market model, including the Main Market and AIM,
     will continue to be actively supported and promoted to their
     fullest potential

 -   The combined entity will support open post-trade architecture and
     will look to promote competition in clearing and settlement for
     the benefit of users

 -   The LSE brands will be maintained and promoted

 A robust governance and regulatory proposal

 -   LSE will continue to be run as a Recognised Investment Exchange
     ("RIE") regulated solely by the UK Financial Services Authority
     ("FSA")

 -   NASDAQ has held detailed discussions with the FSA and is
     confident that, following the Transaction, LSE will be able to
     meet its obligations as an RIE

 -   LSE will continue to have its own independent board with a
     majority of independent non-executive directors

 -   User representation will be bolstered by the appointment of user
     representatives to the independent board, which will have sole
     discretion over the regulatory regimes applicable to the
     companies listed on LSE's markets and sole discretion for
     determining and ensuring compliance with the FSA's Recognition
     Requirements Regulations

 -   NASDAQ will establish a London Oversight Committee, comprised of
     Board user representatives and an independent Chairman, to retain
     veto rights over proposed changes to LSE listing standards and
     location of the main RIE operations

 -   NASDAQ appreciates and supports the proposed changes to the
     Financial Services and Markets Act announced by the Economic
     Secretary to the Treasury, Ed Balls, and believes its proposals
     are entirely consistent with this legislation

 A proposal that reinforces London's continued pre-eminence as
 Europe's premier financial centre

 -   LSE will continue to be promoted as the primary destination for
     listing and trading UK stocks

 -   LSE and NASDAQ will jointly be promoted as destinations for
     international listings and each will be developed to realise its
     full potential

 -   LSE's headquarters will be maintained in London, and the location
     of the main RIE operations will be subject to the veto of the
     London Oversight Committee which will remain independent of
     NASDAQ

 -   NASDAQ Board meetings will regularly be held in London

 -   NASDAQ intends to seek a secondary listing in London as soon as
     practicable following the completion of the Transaction

 -   Following the Transaction, the combined entity will review the
     branding of the parent company with the intention of arriving at
     a brand which reflects its international reach and expertise

 NOTE:   The Final Offers will not be revised except that NAL
         reserves the right to revise the Final Offers: (i) upon the
         recommendation of the LSE Board; or (ii) if a firm intention
         to make a competing offer for LSE is announced, whether or
         not subject to any preconditions

Commenting on the Final Offers, NASDAQ President and CEO Robert Greifeld said: "We are excited about the prospect of combining two strong businesses to form the leading global, cross-border equity market platform giving issuers the ability to dual-list simultaneously in London and New York. The combined entity will be well positioned to lead further consolidation and compete effectively for the benefit of all market users."

On 20 November 2006 at 9.00 a.m. GMT (4.00 a.m. Eastern Time), a webcast will be available at www.nasdaq.com and a conference call facility for analysts and investors can be accessed by dialling +44 (0)20 7162 0025.

A second conference call and webcast for the benefit of US-based analysts and investors will be held at 8.00 a.m. Eastern Time (1.00 p.m. GMT). The webcast will be available at www.nasdaq.com and the conference call for US-based analysts and investors can be accessed by dialling +1 (800) 811-0667 or +1 (913) 981-4901.

This summary should be read in conjunction with, forms part of and is subject to the full text of the announcement. The Final Offers will be subject to the conditions set out in Appendix I and the full terms and conditions to be set out in the Offer Document and, in the case of certified holders of LSE shares, the Form(s) of Acceptance.

Appendix II to the attached announcement contains definitions of certain expressions used in this summary. Appendix III to the attached announcement contains the sources of certain information and bases of calculations contained in this summary.

Greenhill is acting as lead financial adviser to NASDAQ and NAL, with Dresdner Kleinwort acting as broker.

Financing and advisory services are being provided by Banc of America Securities LLC and Banc of America Securities Limited. In addition, Dresdner Bank is providing financing.

FURTHER INFORMATION

Greenhill, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for NASDAQ and NAL and for no-one else in connection with the Final Offers and will not be responsible to anyone other than NASDAQ and NAL for providing the protections afforded to clients of Greenhill or for giving advice in relation to the Final Offers.

Dresdner Kleinwort, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for NASDAQ and NAL and for no-one else in connection with the Final Offers and will not be responsible to anyone other than NASDAQ and NAL for providing the protections afforded to clients of Dresdner Kleinwort or for giving advice in relation to the Final Offers.

Banc of America Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for NASDAQ and NAL and for no-one else in connection with the Final Offers and will not be responsible to anyone other than NASDAQ and NAL for providing the protections afforded to clients of Banc of America Securities Limited or for giving advice in relation to the Final Offers.

This announcement does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Final Offers or otherwise. The Final Offers will be made solely by the Offer Document and the Forms of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Final Offers, including details of how the Final Offers may be accepted.

In accordance with the City Code, normal United Kingdom market practice, and subject to applicable regulatory requirements and pursuant to exemptive relief granted by the US Securities and Exchange Commission from Rule14e-5 under the US Securities Exchange Act of 1934, (i) Dresdner Kleinwort and/or its affiliates will continue to act as connected exempt principal traders in LSE Shares on the London Stock Exchange and may from time to time make certain purchases of, or arrangements to purchase, LSE Shares or futures contracts or indices over LSE Shares outside the United States, other than pursuant to the Final Offers, before or during the period in which the Final Offers remain open for acceptance, and (ii) NAL, its affiliates, or their respective nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, LSE Shares outside the United States, other than pursuant to the Final Offers, before or during the period in which the Final Offers remain open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. These purchases, or arrangements to purchase, shall comply with applicable rules in the United Kingdom, including the City Code, the rules of the UK Listing Authority and the rules of the London Stock Exchange and applicable US securities laws (except to the extent of any exemptive relief granted by the US Securities and Exchange Commission from Rule 14e-5). Any information about such purchases will be disclosed as required in the United Kingdom pursuant to the City Code and will be available from the Regulatory Information Service of the UK Listing Authority and will be available in the United States at www.nasdaq.com.

Unless otherwise determined by NAL, the Final Offers are not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone or e-mail) of interstate or foreign commerce of, or by any facilities of a national securities exchange of, Australia or Canada or any jurisdiction where to do so would violate the laws of that jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within Australia or Canada or any such jurisdiction. Accordingly copies of this announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from Australia or Canada or any such jurisdiction, and persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise distribute or send it in, into or from such jurisdiction as doing so may invalidate any purported acceptance of the Final Offers. Any person (including, without limitation, any custodian, nominee or trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to forward this announcement and/or the Offer Document and/or any related document to any jurisdiction outside the United Kingdom and the United States should inform himself of, and observe, any applicable legal or regulatory requirements of that jurisdiction.

This announcement contains certain forward-looking statements with respect to NASDAQ, NAL and LSE. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "aim", "will", "may", "would", "could" or "should" or other words of similar meaning or the negative thereof. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the operations of the NASDAQ Group or the LSE Group; and (iii) the effects of government regulation on the business of the NASDAQ Group or the LSE Group.

These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. All subsequent oral or written forward-looking statements attributable to NASDAQ, NAL or LSE or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above.

The NAL Directors and the NASDAQ Directors accept responsibility for the information contained in this announcement, save that the only responsibility accepted by them in respect of information in this announcement relating to LSE, which has been compiled from public sources, is to ensure that such information has been correctly and fairly reproduced and presented. Subject as aforesaid, to the best of the knowledge and belief of the NAL Directors and the NASDAQ Directors (each of whom has 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.

DEALING RESTRICTIONS

Your attention is drawn to certain UK dealing disclosure requirements in relation to the Transaction. These disclosure requirements are set out in Rule 8 of the City Code.

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of LSE, all "dealings" in any "relevant securities" of LSE (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Ordinary Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or upon the "offer period" otherwise ending. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of LSE, they will be deemed to be a single person for the purposes of Rule 8.3.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of LSE by NASDAQ or NAL, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.



     FINAL CASH OFFERS(see Note) OF 1,243 PENCE PER ORDINARY SHARE

                       AND 200 PENCE PER B SHARE

            (PLUS AN AMOUNT EQUAL TO THE ACCRUED DIVIDEND)

                                  BY

                   NIGHTINGALE ACQUISITION LIMITED

     (A WHOLLY OWNED SUBSIDIARY OF THE NASDAQ STOCK MARKET, INC.)

       FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

                   LONDON STOCK EXCHANGE GROUP PLC

1. Introduction

The Board of NASDAQ announces the terms of Final Offers to be made by NAL, a wholly owned subsidiary of NASDAQ, for the entire issued and to be issued share capital of LSE. NASDAQ has requested a meeting with LSE's Chairman to seek a recommendation of the Final Offers in advance of posting the Offer Document (which will be undertaken as soon as possible).

Note: The Final Offers will not be revised except that NAL reserves the right to revise the Final Offers: (i) upon the recommendation of the LSE Board; or (ii) if a firm intention to make a competing offer for LSE is announced, whether or not subject to any preconditions.

2. The Final Offers

The Ordinary Offer

NAL will offer to acquire, on the terms and subject to the conditions and further terms summarised in Appendix I to this announcement and to be set out in full in the Offer Document and, in respect of certificated LSE Ordinary Shares only, in the Form of Acceptance, all of the LSE Ordinary Shares, other than those LSE Ordinary Shares which NAL holds or has contracted to acquire, on the following basis:



   for each LSE Ordinary Share           1,243 pence in cash

The Ordinary Offer values the existing issued ordinary share capital of LSE at approximately GBP 2.7 billion and represents an enterprise value of approximately GBP 2.9 billion (based on LSE's net debt of GBP 284.7 million as at 30 September 2006).

An offer price of 1,243 pence per LSE Ordinary Share would represent:



 -   a 54 per cent. premium over the Closing Price on 10 March 2006,
     the Business Day immediately prior to LSE's announcement that it
     had received a pre-conditional approach from NASDAQ, adjusted for
     the LSE Capital Return;

 -   a 40 per cent. premium to NASDAQ's indicative offer price of 9
     March 2006 as adjusted for the LSE Capital Return;

 -   a 2 per cent. premium over the Closing Price on 17 November 2006,
     the Business Day immediately prior to the date of this
     announcement; and

 -   a multiple of 27.9x adjusted earnings for the 12 months to 31
     March 2006 and a multiple of 24.9x consensus earnings forecast
     for the 12 months to 31 March 2007

The LSE Ordinary Shares will be acquired by NAL fully paid up and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party rights or interests and together with all rights now or thereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid, on or after 20 November 2006 (other than the interim dividend of 6 pence per LSE Ordinary Share announced on 8 November 2006 and to be paid on 5 January 2007 to LSE Ordinary Shareholders on the register of LSE on 8 December 2006).

The B Share Offer

The B Share Offer is being made on the following basis:



  for each LSE B Share          200 pence in cash (plus an amount
                                equal to the accrued dividend as
                                described below)

The B Share Offer values the existing issued B share capital of LSE at approximately GBP 16.5 million. The additional amount is equal to the amount of the non cumulative preferential dividend to which holders of the LSE B Shares would be entitled in accordance with article 7 of LSE's Articles of Association on the date on which the Ordinary Offer becomes or is declared unconditional in all respects (the "Calculation Date"), as calculated (A) by reference to the relevant proportion of the rate applicable to the Calculation Period (as that term is defined in LSE's Articles of Association) during which the Calculation Date occurs, and (B) on the assumption that, on the Calculation Date, there are sufficient profits of LSE available for distribution in respect of the accounting reference period in which the Calculation Date occurs to pay such dividend. For these purposes, the "relevant proportion" shall be the number of days from and including the most recent Payment Date (as that term is defined in LSE's Articles of Association) to but excluding, the Calculation Date divided by 183. The B Share Offer is conditional on the Ordinary Offer being or becoming declared unconditional in all respects.

The LSE B Shares will be acquired by NAL fully paid up and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party rights or interests and together with all rights now or thereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid, on or after 20 November 2006.

In the event that the Ordinary Offer becomes or is declared unconditional in all respects, NASDAQ shall procure that LSE redeems the balance of the LSE B shares in accordance with LSE's Articles of Association.

The Final Offers will not be revised except that NAL reserves the right to revise the Final Offers: (i) upon the recommendation of the LSE Board; or (ii) if a firm intention to make a competing offer for LSE is announced, whether or not subject to any preconditions.

3. Information on NASDAQ and NAL

The NASDAQ Group is a leading provider of securities trading, listing and information products and services. NASDAQ manages, operates and provides its products and services in two business segments: the Issuer Services segment and the Market Services segment. NASDAQ's revenue sources from these segments are diverse. The Issuer Services segment includes revenues from listing fees, client services and financial products. The Market Services segment includes revenues from transaction services and from market data products and services. NASDAQ's core business functions are:

(A) Corporate Client Group - which facilitates the raising of capital through the issuing of securities by companies from around the world and providing support services to enhance an issuer's experience as a public company, including insurance services, investor relations services, and US newswire distribution services;

(B) Financial Products - which creates new index products and financial instruments based on its indices for listing and trading on The Nasdaq Stock Market;

(C) Transaction Services - which provides a forum for investors and intermediaries to trade securities via a world-class quote and order matching platform, delivering sub-millisecond response times, capacity of 98,000 messages per second, and approximately 99.98 per cent. uptime; services are also provided for trade reporting off-book trades, and enabling streamlined connectivity to NASDAQ's market participants with the ability to access, process, display and integrate orders and quotes, which enabled customers to execute trades in over 7,700 equity securities during 2005. The Nasdaq Market Center allows NASDAQ to route and execute buy and sell orders as well as report transactions for NASDAQ-listed securities and those listed on national stock exchanges, including the New York Stock Exchange and the American Stock Exchange, providing fee-based revenues; and

(D) Information Services - which distributes high quality, real-time price and innovative market information relating to trading on NASDAQ's system to over 400,000 professional users and over 1.4 million individual investors every day.

NASDAQ is the holding company of The Nasdaq Stock Market LLC, which commenced operations as a US national securities exchange for NASDAQ-listed securities on 1 August 2006. The Nasdaq Stock Market is the largest electronic equity securities market in the United States, both in terms of number of listed companies and traded share volume. As of 30 September 2006, The Nasdaq Stock Market had 3,206 listed companies with a combined market capitalisation of over $4.1 trillion. NASDAQ also operates The Nasdaq Market Center, which provides The Nasdaq Stock Market participants with the ability to access, process, display and integrate orders and quotes in The Nasdaq Stock Market and other national stock exchanges in the US. Transactions involving 383.1 billion equity securities were executed on or reported to NASDAQ's systems in the first nine months of 2006.

Based on the Closing Price of NASDAQ Shares on The Nasdaq Stock Market on 17 November 2006, NASDAQ's market capitalisation was approximately $5.3 billion.

For the 52 weeks to 31 December 2005, NASDAQ reported gross margin of $526.0 million (2004: $484.6 million) and a profit from continuing operations before tax of $106.3 million (2004: $2.6 million). For the nine months to 30 September 2006, NASDAQ reported gross margin of $504.3 million and a profit before tax of $107.6 million. As at 30 September 2006, NASDAQ had net cash of $254.2 million which includes NASDAQ's investment in LSE at fair market value of $1.3 billion.

NAL is a company incorporated in England on 24 March 2006 at the direction of NASDAQ for the purpose of acquiring LSE Shares. Since its incorporation, NAL has not been engaged in any activities save in connection with the acquisition and holding of LSE Shares and the financing and the making of the Final Offers. NAL is a wholly owned subsidiary of NASDAQ. The current directors of NAL are Adena Friedman, Edward Knight and David Warren.

4. Information on LSE

London Stock Exchange Group plc became the holding company of London Stock Exchange plc on 15 May 2006 pursuant to a scheme of arrangement made under section 425 of the Companies Act and replaced the London Stock Exchange plc as the listed entity on the London Stock Exchange. London Stock Exchange plc is LSE's principal operating subsidiary. It is one of the world's leading stock exchanges and, based in London, is at the heart of global financial markets.

LSE's principal business is providing a market for the issuing and trading of securities by assisting companies to raise capital through the issue of securities; providing platforms for investors and intermediaries to trade these and other financial investments; and collecting and distributing market information. LSE's core business areas are:

(A) Issuer Services - which facilitates the raising of capital through the issuing of securities by companies from around the world and the dissemination of regulatory news (as of 30 September 2006 there were 3,212 companies listed on LSE's markets);

(B) Broker Services - which provides a forum for investors and intermediaries to trade securities via a range of robust electronic trading systems, an effective regulatory environment and a high level of price and trade transparency;

(C) Information Services - which distributes high quality, real-time price, news and other information relating to trading on LSE's platforms to 91,000 professional users and 18,000 non-professional users; and

(D) Derivatives Services - which provides services for trading derivatives through LSE's covered warrants market for retail investors and LSE's subsidiary EDX London Limited.

Based on the Closing Price of LSE Ordinary Shares on the London Stock Exchange on 17 November 2006, LSE's market capitalisation was approximately GBP 2.6 billion ($4.9 billion).

LSE is the largest equity exchange in Europe and the fourth largest equity exchange in the world measured by the domestic market capitalisation of listed shares. LSE is one of the most international of all the world's stock exchanges.

For the 52 weeks to 31 March 2006, LSE reported turnover of GBP 297.5 million (2005: GBP 244.4 million) and a profit before tax of GBP 93.5 million (2004: GBP 92.2 million). For the six months to 30 September 2006, LSE reported turnover of GBP 163.3 million and a profit before tax of GBP 76.7 million. As at 30 September 2006, LSE had net debt of GBP 284.7 million.

5. Background to and reasons for the Final Offers

Background to the Final Offers

NASDAQ has for some time regarded LSE as an attractive business. NASDAQ and LSE have held preliminary discussions with respect to a possible business combination or other strategic transaction on a number of occasions in the past.

Contact between the parties occurred in both August 2005, prior to the announcement by Macquarie of its interest in a potential acquisition of LSE, and in December 2005, following Macquarie's announcement of a hostile offer to acquire London Stock Exchange plc at 580 pence per share. On each occasion, NASDAQ concluded that it should focus on its immediate standalone objectives rather than attempt to consummate a business combination. Following the lapse of Macquarie's offer on 28 February 2006 and the completion of the Instinet Transactions and NASDAQ's subsequent secondary offering, NASDAQ approached LSE.

Believing that a non-binding offer would be of interest to the Board of LSE and favourable to shareholders of LSE, on 9 March 2006, NASDAQ sent LSE a proposal for a business combination between NASDAQ and LSE which included an indicative cash offer for LSE of 950 pence per London Stock Exchange plc share (equivalent to approximately 889.5 pence per LSE Ordinary Share, post the LSE Capital Return).

On 10 March 2006, LSE publicly announced receipt of an approach from NASDAQ and rejected the preliminary offer stating that it believed that the offer substantially undervalued LSE. LSE was unwilling to entertain discussions with NASDAQ during the course of March 2006 and, as a result, on 30 March 2006 NASDAQ announced that it no longer intended to make an offer for LSE, subject to certain limited circumstances.

On 11 April 2006, NASDAQ announced that the NASDAQ Group had acquired 14.99 per cent. of the issued ordinary share capital of London Stock Exchange plc at a price of 1,175 pence per share (equivalent to approximately 1,156 pence per LSE Ordinary Share, post the LSE Capital Return) from certain shareholders of LSE. Between 3 May 2006 and 19 May 2006, NASDAQ announced additional purchases of London Stock Exchange plc shares which brought the NASDAQ Group's aggregate holdings in LSE's issued ordinary share capital to 25.1 per cent. As a result of subsequent share repurchases by LSE, NASDAQ's current holdings represent approximately 25.4 per cent. of LSE's issued ordinary share capital.

Reasons for the Final Offers

The combination of NASDAQ and LSE will bring together two of the world's leading groups in the global exchange market to the benefit of their respective users and the wider global financial community. A NASDAQ/LSE combination will create a cash equities market place with a total market capitalisation in excess of GBP 6.3 trillion ($11.8 trillion) and over 6,400 listed companies. The enlarged group will benefit from the combined strengths of the two organisations, and will present listed companies, traders, and investors with a broad range of services unmatched by any other marketplace currently operating in the world at highly competitive prices. The combined entity will be well positioned to lead further consolidation and compete effectively with any transatlantic or European combination.

Leading global exchange

The combination of NASDAQ and LSE will create a leading global exchange for listing companies of all sizes, from the largest multinational companies to small, growth companies seeking capital for the first time. The Transaction presents an opportunity to give issuers the ability to dual-list simultaneously in Europe and North America's most significant financial centres through one common entity for the first time.

Products and customers

The combination of NASDAQ and LSE will provide exchange users with an opportunity to capitalise on growth in the cash equities market on both sides of the Atlantic. The product enhancements and efficiencies which can be generated from the combination of the two organisations' platforms will bring substantial benefits to exchange users, whether corporate issuers or investors who trade on the NASDAQ and LSE markets. In addition, the combined group will be a key market information services and analytics provider, with distribution to a greater aggregate customer base.

Technology

The combination of NASDAQ and LSE brings together the two world leading fully electronic equities exchanges with the intention to create the pre-eminent, technology-driven, global exchange group. NASDAQ's previous acquisitions of INET and Brut demonstrate a track record of combining electronic trading systems and, after extensive analysis of the capabilities of each organisation's systems, extracting cost savings through the elimination of corporate and systems redundancies. The combined group will feature leading trading technology that can be leveraged across multiple asset classes and further extended on a global basis.

Strategic fit

NASDAQ believes that it makes the best partner for LSE from both a market structure and a business perspective.

NASDAQ has a market structure which is similar to that of LSE, with multiple competing market makers supporting highly efficient and deeply liquid electronic limit order book trading. In addition to order book trading, both NASDAQ and LSE support the ability of market makers and broker-dealers to carry out off-order book transactions under the same regulatory and trade reporting umbrella as for order book trades. In addition to securities listing and transaction based trading operations, both businesses provide market information services and develop financial products.

In addition, NASDAQ and LSE are similarly sized organisations with a long history and experience in providing international companies with access to domestic investors and capital.

6. Strategy and ongoing market structure

NASDAQ respects the strengths of the London market and intends that the LSE operations should continue in a manner consistent with current practice. In particular, the existing market model, including the Main Market and AIM, will continue to be actively supported and promoted as a leading international market centre for capital formation and trading. LSE's headquarters will continue to be located in London and LSE's brands will be maintained and promoted. Following the Transaction, NASDAQ will review the branding of the parent company with the intention of arriving at a brand which reflects the international reach and expertise of the combined entity.

The operations of both NASDAQ and LSE are based on pro-competition, horizontal, technology-led business models. The combined entity will continue to support an open post-trade architecture, and will look to promote competition in clearing and settlement for the benefit of users. NASDAQ will seek the opportunity to work with LCH.Clearnet and SIS x-clear to find opportunities for more intra-European, cross-border trading and more cost effective clearing and settlement solutions. Any process that decreases the cost of trading to participants eliminates market friction and greatly enhances potential growth. NASDAQ is focused on finding ways to lessen trading friction for LSE market participants.

LSE will continue to be promoted as the primary destination for listing and trading UK stocks. LSE and NASDAQ will jointly be promoted on an ongoing basis as destinations for international listings. In recognition of the fact that each listing decision is highly tailored to the specific needs of each issuer, a joint NASDAQ/LSE team will work closely with each issuer to identify the right marketplace for each listing.

7. Benefits for LSE stakeholders

NASDAQ believes that the combination of LSE with NASDAQ will reinforce London's pre-eminence as Europe's premier financial centre and yield benefits to LSE stakeholders.

On the technology side, NASDAQ's current transaction speeds are amongst the fastest in the industry (delivering sub-millisecond executions within the matching engine) and its infrastructure has the capacity to process approximately ten times the current daily average volume of 2.0 billion shares traded. NASDAQ has a track record of selecting leading technologies and successfully migrating services to new back-end platforms. For example, NASDAQ recently completed the migration of NASDAQ-listed trading services from its legacy platform and the Brut platform to INET, a technology that was developed while Instinet was a subsidiary of Reuters Group plc. The platform integration was effected without requiring users to change connections or protocols, with switches put in place to enable orders and quotes to be moved seamlessly to the end user.

NASDAQ also has a strong track record in streamlining its infrastructure to provide market participants more connectivity options at lower fees to users. In 2005, NASDAQ ceased requiring customers to purchase their network connections exclusively and moved to a "bring your own" pricing model. Overall fees charged by NASDAQ to the industry in the first nine months of 2006 were reduced by 78 per cent. relative to the same period in 2005. The average customer is now able to connect to NASDAQ for charges that are between 41 per cent. and 80 per cent. lower than a year ago. In addition, NASDAQ has reduced average execution fees by 55 per cent. since 2002. NASDAQ would hope to bring that positive experience to the London marketplace, with the view in mind of lowering the cost of trading while maintaining a highly secure, highly reliable network infrastructure.

NASDAQ believes one of its primary responsibilities is to lower the total cost of trading for market users whilst providing superior trading capabilities with a focus on client needs. As a demonstration of this focus, NASDAQ commits not to increase standard broker-dealer tariffs for at least three years. Additionally, NASDAQ will leverage its experience in service improvement, price leadership and product expansion for the benefit of the London market and will always be prepared to compete creatively and aggressively for broker-dealer business.

NASDAQ has successfully broadened its range of issuer services to include Directors and Officers insurance, governance advisory services, investor relations services and corporate communication services. It will look to offer these services in the London market.

The service level for users of data products will be increased as combined products will be made available to customers of both exchanges. NASDAQ already distributes its data to 175 direct market data vendors, over 400,000 professional users and over 1.4 million non-professional users. Subject to regulatory parameters, NASDAQ will be able to offer more visibility and transparency of LSE information to US investors, and more visibility and transparency of NASDAQ information to UK investors. Additionally, the two exchanges can learn from the types of data offered to respective users of each exchange to enhance the transparency of both markets. NASDAQ expects new joint data products will be created (subject to regulatory parameters) to leverage the listing and trading strength of each market.

Over the medium term, a combination will bring substantial benefits to issuers and investors. US investors will gain enhanced access to LSE listed stocks, and UK investors will gain enhanced access to NASDAQ listed stocks. This is expected to lead to an increase in trading activity and liquidity resulting in a reduction in the cost of capital for issuers. Subject to regulatory parameters, investors may also benefit from an increased potential for further portfolio diversification.

The two strong, yet distinct, brands of LSE and NASDAQ will together yield stronger competitive benefits to both the London and the New York financial centres.

8. Regulation

Following the completion of the Transaction, LSE will continue to be run as a Recognised Investment Exchange regulated solely by the FSA. The LSE Board will have sole discretion over the regulatory regimes applicable to the companies listed on its market and will have sole discretion for determining and ensuring compliance with the Recognition Requirements Regulations. LSE will also continue to comply with the relevant provisions of the Combined Code on Corporate Governance (the "Combined Code") that apply to it.

NASDAQ, as NAL's ultimate parent company, proposes that LSE will continue to have its own board of directors with a majority of non-executive independent directors, consistent with FSA requirements. User representation will be bolstered by the appointment of two user representatives to the LSE Board.

The LSE Board will also establish a committee of the Board (the "London Oversight Committee") which will comprise of an Independent Chairman (possibly though not necessarily an independent non-executive director) and the two non-executive directors who are user representatives. The London Oversight Committee structure will be mandated as part of LSE's by-laws. This committee will be consulted on and will have the right to veto any proposed changes to (i) the physical location from which 20 per cent. or more of the revenue stream of LSE is serviced to outside the UK; or (ii) the physical location of more than 20 per cent. of the cost base of LSE to outside the UK; or (iii) the listing standards of any LSE market. The Independent Chairman will be an individual with a substantial track record in the economic or regulatory oversight of the City of London. LSE's articles will be amended to authorise LSE to be able to establish this committee and NASDAQ will undertake to the FSA that it will not change this article without FSA consent.

NASDAQ has held detailed discussions with the FSA and is confident that, following the Transaction, LSE will be able to meet its obligations as an RIE.

Furthermore, NASDAQ has held discussions with the SEC in which nothing has arisen which might hinder the consummation of a Transaction.

NASDAQ appreciates and supports the proposed changes to the legislative framework for financial services in relation to recognised investment exchanges and clearing houses announced by Economic Secretary to the Treasury, Ed Balls, and believes its proposals are consistent with the proposed legislation.

NASDAQ will today submit a filing to the Office of Fair Trading and does not expect the Final Offers to give rise to any significant antitrust issues, nor are they subject to any other formal regulatory approvals or a NASDAQ shareholder vote.

9. Governance

NASDAQ proposes that, after completion of the Transaction, the LSE Board would comprise of at least nine directors. Assuming that the total number of directors is nine, then four of these would be executive directors with appropriate international stock exchange expertise and five of which would be independent non-executive directors or user representatives. If the total number is greater than nine, then the non-executives (including any user representatives) would comprise the majority. In assessing the independence of the non-executive directors, the LSE Board would have regard to the provisions of the Combined Code.

At least one member of the LSE Board would also be a member of the NASDAQ Board.

In addition, to ensure that there was appropriate user representation and user input into decision making NASDAQ proposes that two of the non-executive directors of LSE would be user representatives.

NASDAQ will seek the participation of existing members of the LSE Board, in particular the LSE Chairman, on the new independent LSE Board. In any event, NASDAQ is confident that it can recruit appropriate individuals to form the remainder of the independent LSE Board.

10. Management and employees

NASDAQ believes that the skills and expertise exhibited by LSE's operational management will be invaluable to the operation of the combined entity on both sides of the Atlantic and expects LSE management to play a much more significant role in the management of the combined entity than it would in a transaction with a larger counterparty or in a combination with a "federal" business model.

NASDAQ intends to conduct a general review of the business to finalise its identification of synergies in relation to the business, sales and administration functions of the combined entity. At this stage, it is anticipated that this may involve headcount reductions of up to 6 per cent. of the combined staff by the end of 2008. Any reduction would be implemented on a wholly meritocratic basis so as to achieve the best outcome for the enlarged group while ensuring that the operation of LSE's markets and its service levels are not adversely affected.

In the event of the Final Offers becoming or being declared unconditional in all respects, the existing contractual and statutory employment rights, including pension rights, of all the employees of the LSE Group will be observed as required by applicable law.

11. LSE Share Option Schemes

The Ordinary Offer extends to any LSE Ordinary Shares which are unconditionally allotted or issued as a result of the exercise of options granted under the LSE Share Option Schemes whilst the Final Offers remain open for acceptance or before such earlier date as NAL may, subject to the City Code, decide.

If the Ordinary Offer becomes or is declared unconditional in all respects, appropriate proposals will be made to holders of options under the LSE Share Option Schemes.

12. Disclosure of interests in LSE

Save for 54,225,405 LSE Ordinary Shares held by NAL, neither NASDAQ nor NAL (nor any of their respective directors), nor any members of the NASDAQ Group nor, so far as NASDAQ and NAL are aware, any person acting in concert with NASDAQ or NAL, owns or controls or has any interests in securities in any LSE Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or any rights to subscribe for or purchase the same, or holds any options (including traded options) in respect of, or has any option to acquire, any LSE Shares or has entered into any derivatives referenced to LSE Shares ("Relevant LSE Securities") which remain outstanding, nor does any such person hold any short positions in relation to Relevant LSE Securities (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, nor does any such person have any arrangement in relation to Relevant LSE Securities. An "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to Relevant LSE Securities which may be an inducement to deal or refrain from dealing in such securities.

Due to the need for secrecy, NASDAQ has not made enquiry of certain parties who may be deemed to be acting in concert with it after this announcement of the Final Offers. Appropriate enquiry will then be made and appropriate disclosure (if any) will be made in the Offer Document.

13. Financing

The total consideration payable under the Final Offers will amount to approximately GBP 2.0 billion. In addition to cash from NASDAQ's own reserves, NASDAQ and NAL will finance the acquisition of LSE by borrowing under new credit facilities and issuing preferred stock. NASDAQ expects this debt to be comfortably paid down from the strong cash flow generated by the combined entity. Further information on NAL's financing arrangements will be contained in the Offer Document.

Greenhill, financial adviser to NASDAQ and NAL, is satisfied that resources are available to NAL sufficient to satisfy in full the cash consideration payable to LSE Shareholders under the terms of the Transaction.

14. Compulsory acquisition, cancellation of listing and re-registration

If the Ordinary Offer becomes or is declared unconditional in all respects and NAL receives sufficient acceptances under the Ordinary Offer, it will be NAL's intention:

(a) to exercise its rights in accordance with Schedule 2 to the Takeovers Directive Regulations to acquire compulsorily the remaining LSE Ordinary Shares to which the Ordinary Offer relates; and

(b) to procure that LSE makes applications to the UK Listing Authority for the removal of LSE Shares from the Official List of the UK Listing Authority and to the London Stock Exchange for the cancellation of the trading in LSE Shares on its market for listed securities.

Such cancellation of LSE's listing and admission to trading will take effect no earlier than the expiry of 20 business days after the Final Offers become or are declared unconditional in all respects. De-listing would significantly reduce the liquidity and marketability of any LSE Shares not assented to the Final Offers.

15. Overseas Shareholders

The laws of the relevant jurisdictions may affect the availability of the Final Offers to persons who are not resident in the United Kingdom or who are subject to laws of any jurisdiction other than the United Kingdom (or the United States). Persons who are not resident in the United Kingdom (or the United States) or who are subject to laws of any jurisdiction other than the United Kingdom (or the United States), should inform themselves about, and observe any applicable requirements. Further details in relation to overseas shareholders will be contained in the Offer Document.

Offer documentation

The Offer Document and, in the case of holders of LSE Shares in certificated form, the Forms of Acceptance will be posted to LSE Shareholders as soon as possible and as soon as shareholder details have been provided by LSE. In deciding whether or not to accept the Final Offers in respect of their LSE Shares, LSE Shareholders should rely on the information contained in, and procedures described in, the Offer Document and, in the case of holders of LSE Shares in certificated form, the Form(s) of Acceptance.

The Offer Document and, in the case of holders of LSE Shares in certificated form, the accompanying Form(s) of Acceptance will contain important information about the Final Offers.

The Offer Document will not be reviewed by any federal state securities commission or regulatory authority in the United States, nor will any commission or authority pass upon the accuracy or adequacy of the Offer Document. Any representation to the contrary is unlawful and may be a criminal offence.

Your attention is drawn to the further information contained in the Appendices to this announcement.



 ENQUIRIES

 The Nasdaq Stock Market, Inc.                       +1 (212) 401 8714
 Bethany Sherman                                     +1 (917) 836 1724

 Greenhill & Co. International LLP
  (lead financial adviser to NASDAQ and NAL)       +44 (0)20 7198 7400
 Simon Borrows
 Richard Hoyle

 Dresdner Kleinwort Securities Limited
  (broker to NASDAQ and NAL)                       +44 (0)20 7623 8000
 Angus Kerr
 Alex Reynolds

 Gavin Anderson & Company
  (PR adviser to NASDAQ and NAL)              +44 (0)20 7554 1403/1405
 Richard Constant

FURTHER INFORMATION

In accordance with the City Code, normal United Kingdom market practice, and subject to applicable regulatory requirements and pursuant to exemptive relief granted by the US Securities and Exchange Commission from Rule14e-5 under the US Securities Exchange Act of 1934, (i) Dresdner Kleinwort Securities Limited and/or its affiliates will continue to act as connected exempt principal traders in LSE Shares on the London Stock Exchange and may from time to time make certain purchases of, or arrangements to purchase, LSE Shares or futures contracts or indices over LSE Shares outside the United States, other than pursuant to the Final Offers, before or during the period in which the Final Offers remain open for acceptance, and (ii) NAL, its affiliates, or their respective nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, LSE Shares outside the United States, other than pursuant to the Final Offers, before or during the period in which the Final Offers remain open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. These purchases, or arrangements to purchase, shall comply with applicable rules in the United Kingdom, including the City Code, the rules of the UK Listing Authority and the rules of the London Stock Exchange and applicable US securities laws (except to the extent of any exemptive relief granted by the US Securities and Exchange Commission from Rule 14e-5). Any information about such purchases will be disclosed as required in the United Kingdom pursuant to the City Code and will be available from the Regulatory Information Service of the UK Listing Authority and will be available in the United States at www.nasdaq.com.

News Release Details

Final Cash Offers of 1,243 Pence Per Ordinary Share and 200 Pence Per B Share by Nightingale Acquisition Limited for the Entire Issued and to be Issued Share Capital of London Stock Exchange Group plc