Nasdaq has made a new offer valued at £2.7 billion ($5.13bn) for the London Stock Exchange.

The LSE board has rejected the bid, claiming it undervalues the buoyant stock market, which has posted record trades and earnings in recent reports.

Nasdaq already owns more than 25pc of LSE shares, giving it a powerful advantage in the current round of consolidation deals. With the New York Stock Exchange well on its way to takeover Euronext, Nasdaq sees a liaison with the LSE as strategically crucial in its battle for business with its close NYC neighbour.

Shares in the LSE have traded briskly since the offer was made. The BBC calculates that if Nasdaq bought them all, they would have a 50pc holding in the company. That’s unlikely to be the case though.

With a proposed softening of America’s draconian Sarbanes-Oxley rules and a new bill protecting the LSE from foreign regulation from the Treasury, the major obstacles to a merger seem to be melting away.

Clara Furse and her board may have other tricks up their sleeves, not least a tieup with an exchange in the Far East — Tokyo was mentioned recently.

It’s still all to play for.

Euronext has announced that it supports a proposal to merge its stock exchanges with Deutsche Borse and Borsa Italiana, as long as it is part of its merger with the New York Stock Exchange.

The intriguing possibility now opens up of an even bigger transatlantic giant emerging to challenge the London Stock Exchange.

With Nasdaq in talks with the hedge funds which own 30pc of LSE shares and a figure of 1300p being bandied about as the cost of buying out these shares, it’s beginning to look like two great pan-Atlantic exchanges may emerge over the next 12 months.

Unless, that is, Clara Furse can find a white knight to save the old LSE.

With the hedge funds getting restless (they own 30pc of LSE shares) and Nasdaq adopting a laid-back posture (it owns 25.1pc), you might think that the London Stock Exchange was between a rock and a hard place.

Nasdaq, it seems, is quite prepared to sit out the next six months, whereupon it can withdraw its £2.4bn ($4.49bn) offer and make a lower bid for the LSE. This leaves the hedge funds champing at the bit, while the large profits they came in to claim are receding over the horizon.

Meanwhile, back at the ranch, Chief Executive Clara Furse, now apparently supporting an independent, British LSE, is looking eastwards for a possible takeover target. The Singapore Stock Exchange is being mentioned, even though Hong Kong is larger. Maybe Chinese regulation doesn’t appeal.

Furse probably has around five weeks to stitch up a deal or announce her intentions. Whatever happens, Clara knows she’s in for a bumpy ride.

Today the handcuffs come off in Nasdaq’s bid to take the London Stock Exchange. With 25.3pc of LSE shares, the American exchange can bid for the rest at £12.43 per share.

However, sources close to Nasdaq say it can’t afford to buy at that price, so is likely to sit out the next six months. The New York-based company is already heavily in debt and may refuse to gamble, especially as it is now known the British Government intends to legislate to protect London from the onerous American Sarbane-Oxley rules and may pack off any bid to the Competition Commission.

The Times (London) reports : “… there were signs at the weekend that some investors were taking the view that, in the short term at least, the LSE share price could fall in the absence of a bid or an agreed deal. About 12 per cent of the shares are the subject of stock borrowing, a technique that is often used to go short in a share in the expectation of a fall.”

Speculation grew that Clara Furse may seek a deal with a Far East exchange.