Deutsche Börse expects to ask Britain's Office of Fair Trading to approve its planned takeover of the London Stock Exchange this week in an effort to speed up the auction and get ahead of its rival Euronext.
The Frankfurt-based market has already approached the German federal cartel office, the country's antitrust regulator, for approval of its takeover proposal, which would create the second-largest exchange in the world. Werner Seifert, the head of Börse, is anxious to push on with negotiations and was frustrated at the LSE's decision to suspend talks over Christmas. Börse is understood to believe that its proposal would not raise significant competition issues and would be cleared.
Lawyers working for Börse are concerned that a competition examination could delay a deal by many months and give Euronext - which is thought to face fewer regulatory hurdles - a critical advantage in securing a takeover of the LSE.
Chris Tupker, the chairman of Euroclear - the cross-border settlements business owned by its users - warned last week that the takeover of the London market by an exchange that owns securities and settlement houses should put regulators on "red alert." He did not mention Börse by name but the LSE and its customers have voiced concerns that Frankfurt's integrated structure - trading, clearing and settlement - is anticompetitive.
The London Investment Bankers' Association, which is headed by Morgan Stanley's Sir David Walker and represents most of the major users of the LSE, is expected to seek reassurances this week that the cost of trading shares will not rise as a result of a takeover. It is also expected to say it is concerned about the possible lack of competition in settlement and clearing.
Jean-Francois Theodore, the chief executive of Euronext, which runs the Paris, Amsterdam, Brussels and Lisbon exchanges, wants to be sure his bid does not face regulatory hurdles and may also approach the OFT before tabling a formal offer.
Euronext expects talks to last "weeks and weeks", sources say. In some ways, the pan-European bourse is in a better position than its bigger German rival: it already does half of its business in London at the derivatives exchange Liffe, and has proved it can successfully integrate cross-border businesses while retaining their distinctiveness. Unlike Börse, Euronext does not control its clearing and settlement providers.
Both bidders have yet to table formal offers. Yesterday the LSE denied reports that it was working to a timetable of announcing a deal by the end of this month.