Germans court support for 'white knight' bid for LSE

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Rolf Brewer, chairman of the Deutsche Börse, the Frankfurt exchange, said yesterday he believed that any "white knight" bid for the London Stock Exchange should not be a solely German initiative but should be an international effort by all those who back the Anglo-German iX plan.

Rolf Brewer, chairman of the Deutsche Börse, the Frankfurt exchange, said yesterday he believed that any "white knight" bid for the London Stock Exchange should not be a solely German initiative but should be an international effort by all those who back the Anglo-German iX plan.

The iX exchange merger has been thrown into doubt by Tuesday's hostile £846m bid for the LSE by OM Gruppen, owners of the Swedish stock exchange.The supervisory board of the German stock exchange has given its backing to plans to raise money to fund a counterbid for the LSE.

However, Dr Breuer said yesterday such a bid "should be a common effort by all parties interested in the final success of a merger between Deutsche Börse, and the London Stock Exchange, for example our friends in Milan, Madrid and maybe a couple of others as well".

The two southern European exchanges had signed up to join iX's pan-European bourse once London and Frankfurt had completed their first stage of integration. But they are now being assiduously courted by Euronext, the rival French-led exchange grouping of junior European exchanges.

Dr Breuer, who is also chief executive of Deutsche Bank, the German exchange's biggest shareholder, insisted that a white knight bid would have to be at the request of the London Stock Exchange.

Responding to questions from reporters at a ceremony to unveil the Deutsche Börse's new headquarters in Frankfurt yesterday, Dr Breuer said: "We will only act as a white knight if the London Stock Exchange asks," adding that no such request had yet been received.

Although the LSE has postponed the 14 September vote of its shareholders to approve the iX merger deal, the German exchange yesterday said it would go ahead with its own shareholder vote on the same day, insisting that the OM bid did not put the iX deal in jeopardy.

Frank Zarb, the chief executive of Nasdaq, who was present at the ceremony, also sought to distance himself from suggestions that the US technology exchange could break ranks with London and Frankfurt and mount its own bid for the LSE. He said he was still keen on co-operation with iX.

In contrast, Euronext officials said that the rival European grouping was open to an alliance with the LSE if shareholders felt they wanted an alternative to being taken over.

In Stockholm, OM's shares rose for the second day running, closing up 16 kronor at 451. The fact that three-quarters of the bid is in OM paper would normally be expected to depress the value of its shares. LSE shares were last traded yesterday at £28.50 valuing the exchange at £849m - the highest level since trading started in July.

LSE executives yesterday stuck to the official line that the OM bid offered nothing and that the iX deal was still on course. However, behind the scenes there was a growing recognition that the Exchange had a fight on its hands.

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