Don Cruickshank, the London Stock Exchange's (LSE) surprise choice as chairman, is expected to emerge as the non-executive chairman of the combined Anglo-German Stock Exchange group if the merger with the German Stock Exchange goes through next week.
With the talks entering a crucial phase this week, the LSE has been trying to bolster its negotiating position with the Germans by letting it be known that Gavin Casey, the LSE chief executive, has also been talking to Nasdaq, the American exchange which is looking for a way to break into the European market.
The precise share-out of the top jobs in a London-Frankfurt deal has yet to be agreed although Werner Seifert, chief executive of the German exchange has insisted on the hands-on role.
Mr Cruickshank, who in addition to his £340,0000-a-year salary will share in an £8m share and options package if the deal goes through, secretly met Mr Seifert and other senior German exchange executives early last week before his appointment as LSE chairman was officially announced on Thursday. The pair - both former McKinsey consultants - are believed to have struck up a warm working relationship.
One source said yesterday: "It is a nonsense to suggest that Mr Cruickshank would join as chairman without having secured some assurances about his future position in the event of a merger going through."
The Germans, who are seen as having the stronger negotiating hand in the wake of a series of cock-ups by the LSE, recognise the value of having a heavyweight British chairman to counter suggestions that the deal is a German takeover rather than a merger of equals in which London's interests will be fully respected.
More contentious is likely to be the share split, with LSE sources saying over the weekend that London wanted a merger of equals structure.
This is in spite of the larger market value of the German Exchange.
Goldman Sachs and Deutsche Bank, which have been grooming the German Exchange for a flotation within the next six weeks, have put a tentative value of 1.5bn euros on the exchange - which includes Eurex, the German futures market - compared with 1bn (£700m) for the LSE.
That Initial Public Offering (IPO) which was due to be approved by the German Exchange's Supervisory Board on 4 May may now have to be shelved or postponed.
Talks between the two sides continued over the Easter weekend and it is believed that a deal is close.
LSE sources yesterday insisted that nothing had been settled. However, it is clear that the big global investment houses who are the prime customers of both exchanges want a deal.
An agreement by the Germans to remove Clearstream, their clearing and settlement operations, from the merger may go some way to redressing the balance on valuation.
However, the Germans are still believed to be insisting on a 60:40 split as fairer to their own shareholders.
The Germans have already won the argument over the technology platform, with Xetra, the Frankfurt system, having been chosen in preference to the much-hated SETS. Frankfurt is also seen as having the edge over trading in technology stocks with its Neuer Market having already established a more serious investor profile than London's hastily concocted alternative, TechMark.
In a separate development, Crest, which handles the settlement for London Stock Exchange-traded shares, is to slash its charges by two-thirds.
The reductions are likely to be backdated to January and save investors as much as £20m a year.
The move comes as competition between the clearing houses hots up.
Earlier this month, the London Clearing House, which handles clearing for derivatives and commodities trade in London, announced a ground-breaking deal with the French-led Euronext grouping which will enable it to move increasingly into cash clearing, traditionally, in London at least, Crest's preserve.
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