The New York Stock Exchange suffered a setback yesterday when its second-largest investor, Caldwell Asset Management, warned the board not to mount a bid for the LSE.

At this time it’s not known what effect this prohibition might have on any offer being prepared, nor on whether Caldwell intends the warning to be a deal-breaker.

If the NYSE pulls out before it has even declared itself, it will leave the way clear for Nasdaq to tie up a deal with Clara Furse. We expect it to have to pay around £12 ($20.88) per share to clinch it.

And with Euronext and Deutsche Borse occupied with creating a super-borse for the Eurozone, the Anglo-American courting couple could carry on their dalliance in relative peace.

But will NYSE comply with the warning? It would be a soggy response to an exceptional window of opportunity. Faint heart never won fair maiden. Clara would not be impressed.

The New York Stock Exchange would probably get more out of a deal with the London Stock Exchange than its rival, Nasdaq, analysts believe. Most savings would come from combining trading platforms.

Richard Herr, analyst at Keefe, Bruyette & Woods, said: “I think New York has the edge in terms of synergy only because their systems are a little more in flux than Nasdaq’s are.”

The NYSE, which went public on March 8 through the acquisition of listed rival Archipelago, is in the process automating its trading floor with a “hybrid” system which could benefit from the LSE’s SETS technology.

“If NYSE were to acquire the LSE, it could feasibly have more cost saves (than Nasdaq could achieve) because it could adopt the SETS trading technology,” Herr said.

Stuff.co.nz writes: “Nasdaq is a purely electronic market and has been bulking up through acquisitions of rival platforms.”

Herr estimates that the most Nasdaq could save on the LSE’s costs would be about 20 percent, or £100 million ($US55-60m), largely from lower headcount and some technology synergies.

Sandler O’Neill analyst Richard Repetto wrote in a research note published on Monday that potential cost savings make the LSE “attractive” to any buyer.

“We believe the potential cost synergies from consolidating electronic trading platforms is significant,” he wrote.

While the NYSE could benefit more from costs, Nasdaq could be a bigger gainer from the brand value of owning the LSE.

“Clearly listings are about brand and clearly the LSE is a very strong brand. NYSE similarly has a very strong brand and Nasdaq is growing in terms of stature — but it isn’t as strong a brand as NYSE or LSE,” said Herr.

We hear that Euronext has approached Deutsche Borse for talks on a merger between the two exchange businesses.

If successful, this will be lead to a £13 billion-plus ($22.6bn) Europe-wide “super-exchange”. It came a step further today as the Frankfurt-based German Borse gave the nod to a merger with its Franco-Dutch arch-rival Euronext.

Despite receiving the go-ahead from UK regulatory authorities for an assault on the London Stock Exchange, Euronext seems to have withdrawn from the scene. Talks between the two Eurozone giants are expected to take place shortly.

The Times (London) comments: “… a combined Euronext and Deutsche Borse would dominate the European equity and derivatives markets and be capable of competing with heavyweight American exchange markets as the consolidation of the sector moves swiftly forwards.”

Deutsche Borse operates the Frankfurt stock exchange and Eurex derivatives market, while Euronext was formed out of a merger between the French, Belgian and Dutch exchange. It now includes the Spanish and Portuguese markets and owns the London-based derivatives market, Liffe.

Nasdaq’s interest in the LSE, which sparked a 30 percent jump in its share price, is expected to be followed shortly by a counter-bid from the New York Stock Exchange.

A Deutsche Borse spokesperson said: “In light of the increased consolidation dynamics in the exchange industry, Deutsche Borse reconfirms its priority to actively shape the creation of a truly European exchange organization. Deutsche Borse welcomes Euronext’s statement that it intends to work constructively with Deutsche Borse towards this goal. Deutsche Borse is looking forward to enter into concrete negotiations with Euronext management on realizing a combination of the two groups on the basis of a merger of partners with a view to create a global market leader in the industry.”

It’s beginning to shape up for a Eurozone consolidation followed by a transatlantic super merger involving the NYSE and possibly Nasdaq too. Never were the Anglo-Saxon and European business models apparently so far apart.

Shares in the London Stock Exchange have continued their rise today, though at a less frantic pace than yesterday:

Currently (14.00 GMT, Tuesday) the price stands at £11.58 ($20.15).