The Board of London Stock Exchange plc ("the Exchange") notes Nasdaq’s recent investment in the Exchange at 1,175 pence per share.

The Exchange has extremely strong growth prospects as a standalone business, reflecting a structural shift in trading patterns facilitated by its Technology Road Map upgrade, which continues to produce record levels of trading on SETS. Between January and March 2006, the average daily number of SETS trades grew 38 per cent year on year, well ahead of the rate required to meet the growth targets set out in the Exchange’s shareholder circular of 17 February 2006. March itself was the third successive record month for SETS, with value traded up 69 per cent on March 2005.

Furthermore, the Board is exploring the options available to it to create additional value for shareholders and customers, including discussions with other major exchanges. The Board believes that the current share price does not fully reflect the shift in its growth prospects, its unique franchise or the strategic options available to it.

The Exchange will proceed with its £510m return of capital.

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Merrill Lynch International, which is regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to London Stock Exchange in relation to the matters referred to in this announcement and no one else and will not be responsible to anyone other than London Stock Exchange for providing the protections offered to clients of Merrill Lynch International nor for providing advice in relation to the matters referred to in this announcement.

Lehman Brothers Europe Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to London Stock Exchange in relation to the matters referred to in this announcement and no one else and will not be responsible to anyone other than London Stock Exchange for providing the protections offered to clients of Lehman Brothers Europe Limited nor for providing advice in relation to the matters referred to in this announcement.

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