NYSE Euronext and Australia's ASX Ltd may be interested in buying part of Nasdaq Stock Market Inc's 31 percent stake in London Stock Exchange Plc, a person familiar with the matter said.

Singapore's state-owned Temasek Holdings may also be interested in buying part of the stake, while other parties, including private equity firms, have expressed interest, the person said.

Stock exchanges around the world have been looking at tie-ups to offer customers a broader range of products and to lower their technology costs.

NYSE Group, which runs the New York Stock Exchange, bought European exchange operator Euronext for $14.6 billion in April to form NYSE Euronext. The LSE, which has fended off a number of takeover bids, is buying Italian rival Borsa Italiana.

Nasdaq, the largest U.S. electronic stock exchange, said last week it was considering selling its around $1.6 billion (800 million pound) stake in the LSE so it could focus on buying Nordic exchange operator OMX.

Nasdaq said at the time its bankers were already in touch with interested parties, and that it would not sell its LSE stake to a single buyer.

ASX, with a market value of A$8.13 billion ($6.7 billion), last year bought smaller rival SFE Corp Ltd to expand into the derivatives business. It was also seen by some analysts as a move to thwart any takeover attempts.

The Australian exchange operator said there was no basis for market speculation that it intended to buy Nasdaq's LSE stake at this stage. Should that position change, ASX will inform the market, spokesman Matthew Gibbs said in Sydney on Tuesday.

Concerns that NYSE Euronext will acquire another company have depressed its share price.

NYSE Euronext spokeswoman Richard Adamonis said the exchange does not comment on rumor or speculation.

RATIONALE?

ASX Chief Executive Robert Elstone has previously played down the possibility of buying small stakes in global exchanges, and analysts said there was little rationale for it to get involved.

It's hard to see what value a cross border deal would add, said Sydney-based Credit Suisse analyst Arjan van Veen. And obviously it would mean quite a substantial investment. It will be hard to see shareholders stumping up money for that as well.

Nasdaq does not intend to sell its entire 31 percent LSE stake to one buyer, but may sell 29.9 percent to a single party and the remaining shares in the market, the person said.

Under UK rules, an investor who buys more than 30 percent of a company has to automatically make a bid for all of it.

If the price is not right, Nasdaq may choose not to sell its LSE stake at all, the person said. At this point, there is no front-runner, the person said, adding talks were just starting.

Nasdaq Chief Executive Robert Greifeld said last week a premium was justified for its LSE stake.

Nasdaq wants to use the proceeds to pay down debt and buy back shares, which would effectively raise the value of its cash-and-share bid for OMX and give it a boost in the fast-consolidating global stock exchange sector.

Nasdaq is locked in a $4 billion bidding war with Borse Dubai for OMX, which owns exchanges in Sweden, Denmark, Finland, Iceland and the Baltic states.

PROTECTIONISM

Singapore's Temasek's interest comes amid growing protectionism in Europe and the United States toward sovereign wealth funds making aggressive overseas investments in search of higher returns.

Government-owned investment vehicles such as Temasek and its sister agency, Government of Singapore Investment Corp, control about $2 trillion -- roughly the size of France's economy -- a figure that is expected to grow to $12 trillion by 2015.

Britain's The Sunday Times has reported that a deal between Nasdaq and Temasek could lead to a full takeover of the LSE by the Singaporean investment group.

The Observer newspaper said Nasdaq was seeking to sell up to half its LSE stake to Germany's Deutsche Boerse.

The Daily Telegraph reported on Monday that Nasdaq may sell its LSE stake to Borse Dubai and make a joint bid with the Gulf exchange for OMX. It also said Nasdaq, which originally agreed to buy OMX for $3.7 billion, was expected to launch a higher bid closer to $4 billion.

Temasek and Borse Dubai officials were not immediately available for comment, while Nasdaq and Deutsche Boerse officials declined to comment.

ASX shares were flat at A$47.59 ($39.21) on Tuesday, in line with the benchmark S&P/ASX 200 Index.

($1=0.4993 Pound)

($1=A$1.21)

(Additional reporting by Miyoung Kim in LONDON, Ovais Subhani in SINGAPORE and Andreas Framke in FRANKFURT)

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