LONDON, Nov 20: The London Stock Exchange on Monday rejected the latest takeover offer worth over $5 billion from the US Nasdaq market. The LSE earlier on Monday received an improved bid and request for a meeting from the Nasdaq stock market.

“The board firmly believes that the proposal ... substantially undervalues the company and fails to reflect its unique strategic position and the powerful earnings and operational momentum of the business,” AFP quoted the LSE as saying in a statement which also rejected Nasdaq's request for a meeting.

The bid is Nasdaq's second attempt at taking over the firm. In March, it dropped a proposed £2.43bn ($4.2bn) bid for the exchange after the LSE rejected its advance.

Nasdaq said it had paid £87.8m to buy seven million LSE shares, raising its stake in the group to 28.75 per cent.

Shares in the London market have surged more than 124per cent over the past year amid ongoing speculation that it will be subject to a takeover offer.

Nasdaq earlier said it planned a dual listing in London and New York if its offer of £12.43 a share was successful.

The US firm was the latest in a long line of foreign suitors to approach the London market. German market Deutsche Boerse, Australian investment bank Macquarie and the pan-European exchange Euronext have all abandoned offers for LSE since December 2004.

The approaches have prompted the UK watchdog to voice concern about a foreign takeover as it could lead to regulatory changes.

Nasdaq attempted to ease these concerns with its offer saying that the UK exchange would continue to be regulated solely by the UK's Financial Services Authority.

Meanwhile, the London stock exchange has resisted approaches saying that it can continue to grow alone. Earlier this year, LSE chief executive Clara Furse said the company would not do a deal for the sake of doing a deal.

Last month, city leaders warned that the LSE risked losing its dominant market position in the face of growing global competition.