Speculation is continuing about Nasdaq's motives

Nasdaq revealed it had increased its holding in two separate announcements just three hours apart.

The news came a week after the US group increased its LSE stake to 18.7% from 15% to 18.7% - increasing speculation it was a mulling a new bid for the LSE.

In March, Nasdaq withdrew a proposed �2.43bn ($4.2bn) bid for the LSE.

Nasdaq made the decision after the UK bourse rejected its approach.

Takeover tussle

Earlier this year, the LSE also fought off a takeover offer from Australian investment bank Macquarie.

"We are pleased to have increased our strategic stake in LSE through this significant purchase, which takes us through the important threshold of 20%," said Nasdaq chief executive Bob Greifeld.

"We look forward to working constructively with LSE as its largest shareholder," he added.

Earlier, the US exchange said it had paid �128.4m - or 1,248 pence per share - for 10.3 million shares, lifting its holding in the LSE to 22.7%.

Just a few hours later it made a new announcement saying it had purchased a further 3.5 million shares in a �43.7m deal, pushing its stake closer to the 25% mark. The LSE declined to comment on Nasdaq's move.

If the company reaches the 25%, it will acquire what is called a blocking stake, which would give it certain veto rights.

But analysts will be watching more closely when and if Nasdaq approaches the 30% limit, after which a company is obliged, under takeover rules, to bid for the remaining shares.

"We're moving closer to the endgame now," said Andrew Mitchell at brokerage firm Fox-Pitt, Kelton, adding that Nasdaq's latest move made an NYSE bid "less and less likely".