There are two problems in evaluating the London Stock Exchange’s share price. One is the lack of independent analysis on the stock, given how many investment banks are tied up in the merger with Deutsche Börse.
The second is that, as a nil premium merger with both companies taking shares in the merged group, it is almost impossible to put a price on what LSE investors are getting from the deal. The assumption is that the €450 million of cost savings promised make LSE shares worth holding until such savings come in.
This means taking a long-term view on whether the 24 times earnings multiple the shares are trading on is justified, on the basis of that eventual outperformance. The shares, up 29p at