Figures see LSE make case for staying a standalone business

The UK exchange, which has been a takeover target since its $3.5bn bid for a Canadian rival collapsed last month, said revenue for its financial first quarter to the end of June rose to £190.2m from £167.3m last year.

“The LSE has multiple Plan Bs – not just merger and acquisitions as speculated with Nasdaq but including other possible partners both listed and unlisted,” said Daniel Garrod, an analyst at Barclays Capital.

“The LSE is delivering on its organic diversification strategy,” he added.

The exchange’s stock is trading around a 12-month high on speculation the LSE may become a takeover target for larger rivals such as US peer Nasdaq OMX or the Singapore Exchange, traders have said.

The stock exchange has been in the spotlight since the end of June when the group dropped its own merger plan with Canada’s exchange TMX Group.

The LSE announced a friendly merger with TMX in February but a Canadian consortium named Maple opposed the plan in May, arguing the Canadian exchange must not fall into foreign hands.

The group pulled its TMX bid on June 29 because it could not win enough shareholder support.

LSE shares have since risen by 17 per cent as traders have gambled the UK exchange would itself become a takeover target.

“There are various influences on the share price in the short term including the ongoing questions regarding industry consolidation,” said JP Morgan analyst Rae Maile.

“The fact that earnings estimates remain on an upward trend is likely to be supportive of the share price in the short term,” Maile added.

First quarter revenue in the LSE’s main markets unit was up 4 per cent to £79.7m, as bond trading rose on the European sovereign debt crisis.