Euronext undermines German bid with rival London exchange

Euronext, the Franco-Dutch group which owns the Liffe derivatives market, is planning to launch a rival to the London Stock Exchange.

The group, which runs the Paris and Amsterdam ex- changes as well, is also considering a rival bid to counter the £1.35bn offer for the LSE made by Frankfurt's Deutsche Börse. The LSE rejected the German offer but said that it would enter into talks to see if the Börse could improve its deal.

Meanwhile, Euronext is working with three investment banks - UBS, Morgan Stanley and ABN Amro - to see if it can outbid the Börse.

However, Euronext's board is unlikely to make a final decision on whether to bid until after the New Year.

Meanwhile, it has been quietly working on plans for a rival stock market in London. A team from Euronext Paris has been at the Liffe offices next to Cannon Street station developing a trading platform for UK stocks and shares. It have been holding discussions with major securities firms to secure their support for the project.

Initially this was seen as a way of fighting back after the LSE started a business trading major stocks on the Amsterdam markets.

However, the London stock market project has taken on new importance after announcements of the Börse 's bid approach.

The German indicative offer of 530p per share is more than 50 per cent higher than the trading price last month. Dealers in London are holding out for a higher bid and the shares closed at 556p on Friday.

The Börse's offer has run into other problems, both in London and in Frankfurt.

In London, securities firms which use the LSE are concerned about how a German takeover would affect the way deals are handled by back offices - a process called clearing and settlement. The Börse owns its own clearing and settlement company, Eurex, and all deals done on the Börse have to use it.

LSE trades are cleared through a company called LCH/Clearnet, which is partially owned by Euronext and partially by the securities firms, and settled on Crest, an independent operation. The Börse has offered to honour all existing clearing and settlement contracts but these only run for about a year. To appease unhappy brokers, it may be prepared to extend this offer further.

However. the European Commission may look into the issue of settlement.

It is understood that the EU is in favour of further consolidation of stock markets, as it feels this would aid a single market in securities. But it would be concerned about the competition issue of there being no choice in clearing and settlement.

The Börse also has problems in Frankfurt after its chief executive, Werner Seifert, suggested that a merged company would be run out of London, with Clara Furse, the LSE chief executive, taking a leading role. The Mayor of Frankfurt has raised concerns about this move, suggesting that it could lead to the loss of up to 1,400 jobs in Germany.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor