The LSE is in talks with Deutsche Börse in Frankfurt to clinch a £20bn merger – their third attempt at a tie-up in 16 years. It would combine the LSE’s share trading operation with the German exchange’s Eurex derivatives business, creating the third largest exchange operator in the world in terms of stock market value.
However, Intercontinental Exchange, which is based in Atlanta and owns the New York Stock Exchange, said in a statement on Tuesday morning that it was “considering making an offer” for the LSE. It stressed that no approach had been made to the LSE’s board, and no decision had been made as to whether to pursue such an offer.
The news sent shares in the LSE up 8.8% to a record high of £29.14 in early trading.
The LSE confirmed in a statement that its board had not received a formal proposal from ICE, adding that discussions with Deutsche Börse “regarding the potential merger of equals between the two groups continue to progress”.
Bloomberg News reported late on Monday that ICE was preparing a counterbid with advisers including Morgan Stanley. Chicago-based CME Group is also assessing whether it wants to enter the fray, according to the news agency.
The world of exchanges has seen a flurry of dealmaking in recent years. ICE, run by Jeff Sprecher, took a big slice of the European derivatives market when it bought NYSE Euronext in 2013, which gave it the derivatives business Liffe.
Under UK takeover rules, ICE must make a formal offer for the LSE no later than 29 March, and Deutsche Börse must table an offer by 22 March.
Deutsche Börse and the LSE are planning a “merger of equals” in which both companies would share control of the boardroom, retain their separate brands and operate under a holding company structure.
The German exchange would own 54.4% of the merged holding company, compared with LSE’s 45.6%. The LSE’s chief executive, Xavier Rolet, would leave. Rolet has been on an acquisition spree since taking charge in 2009.
His Deutsche Börse counterpart, Carsten Kengeter will take the same role at the combined company.
This article was written by Julia Kollewe, for theguardian.com on Tuesday 1st March 2016 10.19 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010