Liffe board divided over competing takeover offers

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The Independent Online

The board of Liffe, London's futures and options exchange, was last night locked in heated discussions over the merits of three competing takeover offers, with directors lacking a consensus over the company's most suitable partner.

The London Stock Exchange is thought to have offered £18 a share, valuing Liffe at about £550m, while Eurex, the derivatives exchange controlled by Germany's Deutsche Börse, and Euronext, the Paris-based stock and derivatives exchange, are thought to have offered at least £17 a share. The LSE offered half-cash, half-shares, while its rivals offered cash.

There was surprise among some observers that Rudolf Ferscha, chief executive of Eurex, was responsible for outlining the German offer, rather than Werner Seifert, Deutsche Börse's chief executive. It is thought that Eurex's proposal was to combine its derivatives operations with Liffe's, a move that would make it cheaper for arbitrage traders to transact across the two markets.

The plan, to be bankrolled by the Börse, would see Hugh Freedberg, Liffe's chief executive, oversee the London-based operations. It was unclear what position was offered to Sir Brian Williamson, Liffe's chairman.

Clara Furse, the LSE's chief executive, proposed developing a new platform, based on Liffe's Connect system, allowing equities and equity derivatives to be traded together. She offered Mr Freedberg and Sir Brian roles as deputy chief executive and deputy chairman. Jean-François Théodore, chief executive of Euronext, suggested Liffe become the hub for all Euronext's derivatives activities, with Mr Freedberg and Sir Brian remaining in situ.

The failure of Liffe's board, which controls 40 per cent of the company, to eliminate a bidder implies growing fissures between directors set on a domestic deal and others opposed to recommending a bid involving shares.

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