LSE investors set to vote against lifting 4.9% limit on shareholdings

Click to follow
The Independent Online

Shareholders in the London Stock Exchange are expected to vote overwhelmingly against lifting the 4.9 per cent limit on individual shareholdings at a formal meeting in London today.

Shareholders in the London Stock Exchange are expected to vote overwhelmingly against lifting the 4.9 per cent limit on individual shareholdings at a formal meeting in London today.

The vote will in effect kill off the £1bn hostile bid for the LSE by OM Gruppen, the Swedish stock market group, even though OM has announced it will call its own meeting of LSE shareholders for 6 November.

Most brokers expect the meeting to be a formality, in sharp contrast to last month's rowdy shareholder meeting, which prompted the resignation of Gavin Casey as chief executive the following day.

However, Don Cruickshank, the LSE chairman, is expected to take advantage of the opportunity to build on his speech last week to Apcims, the retail stockbroker group, at which he set out plans to promote London as an international market for growth companies.

Said one source close to the LSE camp: "Not everybody was at the Apcims meeting and we feel that he should say something on Thursday."

Most of the smaller stockbrokers believe that the LSE should now concentrate on getting a strong chief executive and see no urgent need for the LSE to strike a deal with a rival exchange.

However, most of the bigger brokers still believe that London cannot go it alone but needs to strike a deal with at least one major European stock market grouping to avoid being marginalised by consolidation.

They believe that London should take advantage of the current situation to rebuild confidence among its shareholders and form a clear consensus view on the objectives that any merger discussions with other parties should aim to fulfil.

Both Euronext, the merged Paris, Brussels and Amsterdam exchanges, and Nasdaq, the United States hi-tech stock market, have made overtures to the LSE since the collapse of the iX merger with Frankfurt.

The Germans have also made it clear that they still want to be involved in a deal with London. However, many observers see Frankfurt as having been seriously weakened by the events of the past few months.

The Neuer Markt, the technology market which was seen as one of Frankfurt's great achievements, has become seriously tarnished in investors' eyes since the collapse of the tech bubble.

Werner Seifert, Frankfurt's chief executive, has also seen a raft of high level departures which have weakened his management team and undermined the credibility of his claims to be the best man to run a pan-European stock market.

Comments