The race to consolidate the world's big stock exchanges appeared to be entering its final furlong yesterday, with the New York Stock Exchange (NYSE) widely expected to put a merger plan to Euronext as early as tomorrow night.
As NYSE contemplated its big move, its rival Nasdaq revealed it had lifted it stake in the London Stock Exchange from 24.1 per cent to 25.1 per cent, putting it in a strong position to influence events in London.
The American exchange paid around £27.4m for another 2.22 million LSE shares, making it more difficult for a rival to make a move on London. NYSE's financial advisers, Citigroup, were locked in talks yesterday with their opposite numbers at Morgan Stanley and ABN Amro, the two banks acting for Euronext, to hammer out a detailed merger proposal as Deutsche Börse published a recipe for its own merger with Euronext that appeared to make too few concessions.
Jean-Francois Theodore is thought to favour a tie with America over a marriage with Germany as the former poses low regulatory hurdles and could be quickly put to bed.
Publicly Mr Theodore says all options remain open, but he is understood to want to be in a position to recommend NYSE to shareholders at a meeting on Tuesday. He is calling for a motion to be voted down to approve in principle a merger with Deutsche Börse, forced on to the agenda of the meeting by shareholders with ties to hedge funds.
Earlier this week, the New York-based hedge fund Atticus Capital, which owns a stake of around 9 per cent in Euronext, threatened to unseat senior managers there unless a deal is done and back a merger with Deutsche Börse should no other firm proposal have been tabled by Tuesday.
Atticus formed part of the shareholder rebellion that forced Deutsche Börse to withdraw a bid for the LSE last year and ultimately cost Werner Seifert, then the chief executive, his job.
Also part of that revolt was TCI, a London-based hedge fund and major Deutsche Börse shareholder, that is also throwing its weight behind a German merger with Euronext.
Meanwhile, Deutsche Börse continued to insist yesterday that a combined group should be housed in Frankfurt and run after a time by Reto Francioni, Deutsche Börse's chief executive. Mr Theodore would have a hand on the tiller only for an unspecified "transition period" before he was shifted to the combined company's supervisory board where the chairman would be a Deutsche nominee.
Both location and leadership stymied earlier merger talks, as did the structure of Deutsche Börse.