Second takeover approach for Stock Exchange

Click to follow

The London Stock Exchange is facing a possible bidding war today after receiving its second takeover approach in a week.

The London Stock Exchange is facing a possible bidding war today after receiving its second takeover approach in a week.

Paris-based rival Euronext made an approach just a week after the LSE said it had knocked back a £1.35 billion offer from Germany's Deutsche Boerse.

LSE said talks with both companies would continue.

In relation to Euronext, it said: "The approach is at an early stage and therefore does not require a response at this point."

The LSE is Europe's biggest stock market and one of the world's oldest exchanges, with stocks worth a total of £1.4 trillion.

More than 300 firms worldwide trade on the LSE, which last year handled more than 59 million transactions - an average of 234,000 trades a day.

There has been extensive speculation about a possible takeover of the much sought-after company since an attempted merger with Deutsche Boerse failed in 2000.

Pan-European stock exchange Euronext was formed in 2000 through the merger of the Amsterdam, Brussels and Paris exchanges. Nearly 1,400 companies - a quarter of them foreign - are listed on the exchange.

It is seen by some analysts as a more natural fit with LSE. In 2002 it acquired London-based international derivatives market Liffe.

Euronext is not expected to make a formal offer until the new year.

Deutsche Boerse is reportedly planning to fight back by offering senior posts on the board of a merged organisation to the LSE's management team, including chief executive Clara Furse and finance director Jonathan Howell.

It is thought to be reassuring users and management that it would operate the London market as a UK business.

The LSE rebuffed the Frankfurt-based exchange's 530p-a-share proposal last Monday, saying it undervalued the company and the potential savings from a tie-in.

Directors also expressed concern that a takeover approach would face competition and regulatory issues.

Deutsche Boerse has a market value of around 6 billion US dollars (£3.08 billion).

Shares in the LSE have soared from around 350p in October to their current level of 574p, including a rise of more than 3% following today's announcement.

David Buik, at Cantor Index, said he believed there were more synergies in an approach from Euronext, and that the offer price could move up to 575p.