OM seeks alliance with Liffe to cement LSE deal

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The Independent Online

OM Gruppen, the Swedish stock exchange which has tabled a hostile bid for the London Stock Exchange, said yesterday that it intended to seek "an alliance" with Liffe, the London derivatives exchange, to secure London's position as the pre-eminent European financial trading centre.

OM Gruppen, the Swedish stock exchange which has tabled a hostile bid for the London Stock Exchange, said yesterday that it intended to seek "an alliance" with Liffe, the London derivatives exchange, to secure London's position as the pre-eminent European financial trading centre.

The plans, detailed in the offer document for the LSE, are in response to growing calls among smaller City stock brokers for Brian Williamson, the highly popular Liffe chairman, to become involved in the campaign to halt the Anglo-German iX merger deal.

The document, which comes nearly two weeks after OM stunned the City by launching an unsolicited £848.5m cash and shares offer for the LSE, coincided with confirmation from the Frankfurt exchange that it too was postponing indefinitely Thursday's shareholder vote on the Anglo-German merger. The LSE has postponed its shareholder vote on the iX deal, originally scheduled for the same day.

The board of the German exchange also confirmed it was extending the contract of Werner Seifert, its chief executive, until 2006, to damp down speculation that Mr Seifert, whose contract was to expire next July, could lose his job over the iX merger debacle.

The board of Deutsche Borse named a replacement for Jorg Franke, the head of the Eurex, Deutsche Borse's derivatives exchange, who is quitting after a bust-up with Mr Seifert. His replacement is Rudolf Ferscha, chief operating officer for Germany of Goldman Sachs, the US investment bank.

The publication of the OM document, which starts the clock on the formal City takeover panel bid process, is also seen as clearing the way for potential counterbids. As well as Euronext, the rival grouping of the Amsterdam, Paris and Brussels exchanges, Instinet, the Reuters broking arm, has also been looking at bidding either on its own or in partnership with Euronext.

There is also support among London brokers for Nasdaq, the US technology market, to detach itself from iX and agree to come in with a bid for the LSE alone or in partnership with OM.

Per Larsson, OM's chief executive officer, said OM planned a series of UK-wide briefings with LSE members to try to convince them that it alone offered the "clarity and dynamism" to regain London's position as the main home for secondary trading and for Initial Public Offerings (IPOs).

He said the Anglo-GermaniX merger would "squander London's potential", fragment the market, split regulation and cede control of lucrative technology IPOs to Frankfurt.

Don Cruickshank, the LSE chairman, dismissed the OM bid as a "cul-de-sac" for the London market.

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