Updated from 2:35 p.m. ESTMoving to extend its reach overseas, the Nasdaq Stock Market ( NDAQ) made an unsolicited $4.2 billion offer to acquire the London Stock Exchange. The LSE deemed the bid is too low. According to a statement by the LSE, the Nasdaq's offer is all cash and unsolicited. It follows a lower takeover bid from Australia's Macquarie Bank, which was also rebuffed by the target. That bid was withdrawn last month "The board of London Stock Exchange firmly believes that the proposal, which represents only a 8% premium to the current market price, substantially undervalues the company, its unique position and the very significant synergies that would be achievable from the combination of London Stock Exchange with any major exchange group," the exchange said. In a statement, the Nasdaq highlighted the premium to previous bids and the stock's current price. The Nasdaq said its bid is 64% higher than the offer from Macquarie and 72% above the trading price the day before Macquarie's bid was disclosed in August 2005. Macquarie finally dropped its bid last month after spending months jousting with the LSE. Prior to Macquarie's bid, the Deutsche Borse made an offer in December 2004 for the London exchange; shortly after, Euronext said it was interested in the company. The Nasdaq, whose own market cap is about $4.2 billion, appears to have about $700 million in cash on its balance sheet following a follow-on stock offering in February. The company didn't discuss financing in its statement, and observers believe it would need a substantial slug of debt financing to pull off an acquisition. Merrill Lynch, J.P. Morgan and Credit Suisse acted as joint book-running managers in the recent equity offering. A combination of Nasdaq and the LSE would create the only cross-border exchange. The Nasdaq's statement said that the companies would be able to gain "significant efficiencies" from a deal. The response also said that the company would "ensure that LSE continues to be a Regulated Investment Exchange regulated by the FSA." The Nasdaq offer comes two days after its U.S. rival, the New York Stock Exchange ( NYX), completed its merger with Archipelago Holdings, giving the exchange a publicly traded stock for the first time in its 213-year history. Many observers have expected the NYSE to use the shares as currency to buy other exchanges. Nasdaq's shares were recently up $2.40, or 6.1%, to $41.90. The NYSE's shares were up $1.52, or 1.5%, to $77.25.