Euronext unveils details of LSE offer - but not the price

EURONEXT UPPED the ante in the battle to take over the London Stock Exchange by offering savings more than double those proposed by its rival, Deutsche Borse. However, Euronext refused to get into a bidding war by declining to put a price on the table.

The LSE has twice turned down Deutsche Borse's indicative offer of 530p a share - valuing it at pounds 1.3bn - as too low.

The London exchange remained silent yesterday on Euronext's plans to create Europe's largest stock market, pointing to the lack of a price tag. It said it was ready to talk to both suitors about an offer that fully valued the company and could be implemented. Jean-Francois Theodore, Euronext's chief executive, said: "Euronext is the natural partner of the LSE and we share the same business model."

Euronext, which runs the Paris, Brussels, Amsterdam and Lisbon exchanges, promised investors annual pre-tax cost and revenue gains of about Û203m (pounds 140m), compared with Deutsche Borse's Û100m. It also offered to immediately cut user fees by 10 per cent - similar to reductions announced by its German rival, with further fee cuts to come. It would seek a dual primary listing in London and Paris to reassure UK regulators, with the LSE regulated solely by the Financial Services Authority.

Last week the FSA highlighted serious concerns about a foreign takeover of the LSE, saying users' fears would be allayed by the LSE having a parent company in the UK and its primary listing in London.

M. Theodore said Euronext would move to a unitary, single-tier board, with half of the non-executive directors drawn from the City. The head of cash trading, who would also head the LSE, would be based in London. Asked whether he had offered the job to the LSE's, chief executive, Clara Furse, M. Theodore said the allocation of jobs had not yet been discussed.

Euronext estimated it could cut annual costs by Û152m in the second year after the merger's completion and add Û51m to revenue in the third year. Most of the cost savings would come from moving to a single share trading platform, but also from moving Euronext's UK derivatives exchange, Liffe, to the LSE building at Paternoster Square. One-third of Euronext's staff are already in London, where 41 per cent of its revenue is generated. Euronext estimated it would cost Û184m to implement the merger.

Deutsche Borse and Euronext have filed their interest to the UK's Office of Fair Trading, which could refer the proposals to the UK's Competition Commission or European regulators by the end of March. Should they be referred, it could take until September before a decision was made, M. Theodore said, suggesting he would not make a formal bid until getting clearance.

Euronext said it had agreed in principle debt financing with a group of eight banks. Analysts at Bear Stearns estimated it could afford to bid between pounds 6.40 and pounds 6.90 a share, far higher than the current LSE share price, which closed at 572p yesterday.

Richard Dunbar, of Scottish Widows Investment Partnership, which owns 4.7 per cent of the LSE, said Euronext's proposals were "credible", after rejecting Deutsche Borse's bid as undervaluing the LSE last month.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
News
The Swiss Re tower or 'Gherkin' was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it
news
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

HR Business Partner (Maternity Cover 12 Months)

£30000 - £34000 Per Annum 25 days holiday, Private healthcare: Clearwater Peop...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on