US market operator Nasdaq says it will vote in favour of the London Stock Exchange's (LSE) proposed deal to merge with Borsa Italiana.
Nasdaq is the LSE's largest shareholder, having built up a 30% stake following its failed bid to take over the UK exchange.
There has been heated speculation that the US exchange would oppose LSE's bid for Borsa Italiana in order to pave the way for another attempt to bid for the LSE in the future. The merger deal will dilute Nasdaq's stake in the business to about 22%.
But in a statement Nasdaq says after evaluating the transaction and meeting with the senior management of both the LSE and Borsa Italiana, it concluded that it is an "appropriate transaction for the LSE".
Nasdaq says it will vote in favour of resolutions due to be put to the LSE's extraordinary general meeting (EGM), to be held on 8 August. The resolutions will enable the LSE to complete its proposed merger with Borsa Italiana.
Yesterday two of the LSE's largest shareholders - Kinetics Asset Management and Horizon Asset Management - said they would both back the LSE's bid. US hedge fund Paulson & Co, which holds a 9.2% stake in the UK market operator, has also come out in support of the proposed merger.