Deutsche facing fresh LSE concerns

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The Independent Online

State Street Global Advisors, a large institutional shareholder in Deutsche Börse, has written to the German group expressing concerns about the lack of communication and financial information surrounding its proposed £1.3bn bid for the London Stock Exchange (LSE).

State Street Global Advisors, a large institutional shareholder in Deutsche Börse, has written to the German group expressing concerns about the lack of communication and financial information surrounding its proposed £1.3bn bid for the London Stock Exchange (LSE).

The fund manager owns 1.6 per cent of Deutsche Börse and more than 2 per cent of the LSE. Richard Lacaille, State Street's chief investment officer in Europe, said while the investment group was not opposed to the merger in principle, important questions remained unanswered and were causing concern. He called for a "wider airing" of what the post-merger financial position of the enlarged group would look like.

"The question in our minds that's not been answered is over promises that have been made to the LSE, and promises made to customers, which will come at a price. If you are going to promise tariff reductions and jobs in London then that comes at a cost," Mr Lacaille said.

The merger could be fantastic but there is such a lack of information of the post-merger financial picture that it's causing people concern."

Mr Lacaille also said he did not necessarily agree with other Deutsche Börse shareholders, such as the hedge fund TCI, which argued the proposed merger was an abuse of shareholders' funds. He said: "It [a deal] could be fantastic, we just don't know. The longer it goes on, the more people will feel uncomfortable."

Mr Lacaille said shareholders could not assume there would be cost cuts in two to three years to produce more synergy benefits. A spokesman for Deutsche Börse said more information would be available eventually.

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