London Stock Exchange seals LCH.Clearnet takeover at last
9 March 2013 4:33 AM IST
The London Stock Exchange Group on Thursday said it had agreed a revised takeover bid of LCH.Clearnet, wrapping up its long pursuit of the British clearing house.
LSEG, which operates the London Stock Exchange and Italy's Borsa, said it would acquire up to a further 55.5 per cent in LCH.Clearnet, adding to its current 2.3 per cent interest.
The London Stock Exchange Group would meanwhile offer 15 euros ($19.55) a share, down from an original offer of 20 euros that had been agreed a year ago.
The terms of the deal had been outlined by the London Stock Exchange Group at the end of January and were determined after long negotiations between the pair that had been triggered by regulatory changes in Europe.
'Together, we see significant revenue opportunities opening up as a result of both customer and regulatory demand for more efficient and more sophisticated tools to manage market risk,' LCH.Clearnet chief executive Ian Axe said of the agreement.
LSEG chairman Chris Gibson-Smith added: 'This is a compelling transaction and we are delighted to be partnering with LCH.Clearnet as global leaders in market infrastructure.
'Experience, stability and trust are cornerstones of our industry and together, we have secured the enlarged group's long-term role in the operation of international capital markets.'
The lower price reflects the higher costs that LSEG would likely face as a result of new regulations increasing the financial buffer that clearing houses must set aside to cover risks of default.Clearing houses play a key role in the transaction of shares between two parties, charging clients a fee to guarantee deals should one side default.
LSEG, which operates the London Stock Exchange and Italy's Borsa, said it would acquire up to a further 55.5 per cent in LCH.Clearnet, adding to its current 2.3 per cent interest.
The London Stock Exchange Group would meanwhile offer 15 euros ($19.55) a share, down from an original offer of 20 euros that had been agreed a year ago.
The terms of the deal had been outlined by the London Stock Exchange Group at the end of January and were determined after long negotiations between the pair that had been triggered by regulatory changes in Europe.
'Together, we see significant revenue opportunities opening up as a result of both customer and regulatory demand for more efficient and more sophisticated tools to manage market risk,' LCH.Clearnet chief executive Ian Axe said of the agreement.
LSEG chairman Chris Gibson-Smith added: 'This is a compelling transaction and we are delighted to be partnering with LCH.Clearnet as global leaders in market infrastructure.
'Experience, stability and trust are cornerstones of our industry and together, we have secured the enlarged group's long-term role in the operation of international capital markets.'
The lower price reflects the higher costs that LSEG would likely face as a result of new regulations increasing the financial buffer that clearing houses must set aside to cover risks of default.Clearing houses play a key role in the transaction of shares between two parties, charging clients a fee to guarantee deals should one side default.
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