LSE's Furse says Euronext merger is a 'win-win'

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The Independent Online

Clara Furse, the chief executive of the London Stock Exchange, talked up the company's share price, indicating yesterday it could be worth up to £7.50 in a possible tie-up with its European rival Euronext.

Clara Furse, the chief executive of the London Stock Exchange, talked up the company's share price, indicating yesterday it could be worth up to £7.50 in a possible tie-up with its European rival Euronext.

Unveiling annual results, Ms Furse said that the LSE is far more valuable than its bidders have indicated. She referred to analysts' valuations for the LSE as a standalone unit of between 415p and 460p. The €150m synergies that a tie-up with Euronext, which owns the Liffe derivatives exchange in London, would offer translate into £3 a share, she said.

That suggests Euronext could afford to pay up to £7.50 a share without destroying shareholder value. "It's a win-win," she said, adding that a deal would have to be done "on the right terms at the right price".

Ms Furse said she continued "general" discussions with Jean-François Theodore, her counterpart at Euronext, whom she sees "quite a lot" as they sit on the board of LCH Clearnet.

Frankfurt's Deutsche Börse is out of the race as a shareholder revolt forced it to drop its 530p-a-share bid - the LSE had also rejected it as too low. All three exchanges are in a Competition Commission inquiry, which is expected to be complete by 12 September.

Ms Furse unveiled a 4 per cent rise in annual revenues to £259.7m, while pretax profits edged up to £89.1m from £88.8m the previous year. "We've had consistent and strong growth in volumes in the last four quarters whereas [Deutsche Börse and Euronext] have seen significant declines in equity markets," she said. However, the cost of bid advisers was a hefty £6.8m.

Deutsche Börse's top executives, Werner Seifert and Rolf Breuer, were ousted last week by shareholders led by international hedge funds, which accused Mr Seifert of "empire-building". Chris Gibson-Smith, the LSE's chairman, said it was "clearly shocking for them," adding: "For us, it reinforced the requirement to listen really closely to shareholders." Its shares rose 8.5p to 471p yesterday.

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