Euronext Set out its plan for a merger with the London Stock Exchange yesterday, a day after its rival suitor Deutsche Börse put pressure on the London market to speed up negotiations.
Jean-François Theodore, the head of the Paris-based Euronext, which runs the Amsterdam, Brussels and Lisbon exchanges, met Clara Furse, his opposite number at the LSE, yesterday. Discussions centred on business fit, integration, governance, regulation and competition, but not price, sources said.
Euronext has yet to come up with a cash value, rumoured to be about 580p a share, after Börse offered 530p a share last month, valuing the London market at £1.3bn. The LSE rejected that indicative offer as too low and cited regulatory concerns, but in effect put itself up for sale by agreeing to further discussions. Börse and Euronext have yet to make formal offers. Neither can afford to lose out in the battle for Europe's biggest stock market.
Talks between the LSE and Euronext are expected to last "weeks and weeks" rather than days, according to sources. Euronext's approach is in marked contrast to that of Werner Seifert, the head of the Frankfurt-based Börse, who is understood to be increasingly impatient with the pace of negotiations. He is thought to have been unhappy with the LSE's decision to suspend the talks over Christmas.
Meetings with Börse and Euronext next week will discuss technology and integration matters, sources said.
The German cartel office, the country's antitrust regulator, said Börse asked it to approve a takeover of the LSE. At the same time, evidence emerged that the German government would oppose a move of Börse's headquarters to London. As a sweetener to the LSE, Börse is offering to manage cash equities and the Eurex derivatives businesses from London.
A spokesman for the German finance ministry said: "We have the crystal clear position that we welcome this [the merger]. We have the remarkable situation that a German company is seeking such an acquisition." But he said the government would want Börse's headquarters to remain in Frankfurt. The ministry denied a report that Hans Eichel, the German finance minister, had interfered in the planned takeover.
Reuters said Börse's works council opposes moving equities and derivatives jobs to London, which it claims would result in 300 job losses in Frankfurt. Mr Seifert has said job losses would be limited to 200 and would occur through natural wastage.
Comments by Chris Tupker, the chairman of Euroclear - the cross-border settlement business owned by its users - added to Börse's discomfort. Without mentioning the German exchange by name, he warned the takeover of the LSE by an exchange that owns securities clearing and settlement houses should put regulators on "red alert".
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