LSE bidders given the green light
The Competition Commission cleared the way for European bourse operators Euronext and Deutsche Börse to launch independent bids for the London Stock Exchange yesterday.
After a seven-month inquiry, the Commission said both Germany’s Deutsche Börse and Paris-listed Euronext could bid, but only if they complied with strict conditions. Those conditions relate to the watering down of ownership and management of the post-share trading service LCH.Clearnet because of monopoly concerns.
Euronext, which is regarded by some as the only party seriously pursuing the LSE after Deutsche Börse said it was dropping its interest, said last night it was studying the cost implication of the report before deciding on its next move. It said it would enter into “close consultation” with its shareholders in an oblique reference to the way Christopher Hohn of hedge fund The Children’s Investment Fund forced the resignation of Deutsche Börse’s CEO earlier this year in the wake of a decision to mount a takeover of the LSE.
The Competition Commission has ruled that Euronext must cut its 41.5 per cent stake in LCH.Clearnet to 15 per cent and shed three seats on the board, leaving it with just one.
It must now weigh up how much such a move would impact on the £203m in cost savings a merger would deliver in terms of synergies.
Some analysts said yesterday’s ruling made a bid less likely because it would take as long as three months for Euronext to assess the ruling and give undertakings regarding Clearnet.
Euronext signalled it was also examining other opportunities around the world, saying it would “assess all available strategic options to maximise shareholder value.”
The LSE reports half-year figures tomorrow. The results are expected to underline strong trading, helped by the increasing number of IPOs and strong growth in the number of trades it is handling.