Sunday, April 09, 2006

LSE and Euronext in talks: The Observer

The British Newspaper, the Observer, is reporting that the London Stock Exchange and the Euronext exchange may be in talks regarding a merger of equals between the two entities. Talks still seem preliminary based on the contents of the article, but the article says current plans would value the LSE at 12 pounds per share, which is a slight premium to where it's currently trading (a little over 10 pounds).

"The advantage of a combination of the LSE and Euronext is that it achieves one of London's biggest objectives: to bolster its presence in the fast-expanding derivatives market by allying itself with Euronext's Liffe, the London financial futures exchange.

But a serious obstacle to a tie-up between LSE and Euronext, which operates exchanges in Paris, Amsterdam, Brussels and Lisbon, is that a block of Euronext shareholders, speaking for at least 20 per cent of its equity, are pushing for a merger with Deutsche Borse, operator of the Frankfurt exchange. Talks between the Germans and French have been going on for several weeks, but last week Euronext said it was looking at the possibility of other partnerships."

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