Watchdog clears Macquarie bid for London exchange

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The Independent Online

The Office of Fair Trading said it would not refer the offer to the Competition Commission, removing any potential for a prolonged antitrust inquiry.

The Commission is still in talks with the Paris-based exchange Euronext over the measures it would need to take before any tie-up with the LSE would be allowed.

Euronext, which operates the Paris and Amsterdam exchanges, among others, must trim its stake in the Clearnet securities-clearing business before it can take its ambitions for London further. The OFT referred Euronext and Germany's Deutsche Börse, which was also interested in bidding for the LSE, to the commission last year.

Shareholder pressure forced Deutsche to drop its interest for the time being, and it has since held discussions with Euronext about a merger of equals. Those talks faltered over disagreements such as where any merged group would be headquartered.

Meanwhile, the Financial Services Authority, the City watchdog, is still talking to Macquarie about its regulatory requirements that the LSE must meet. These centre on the amount of cash it must have available to satisfy short-term obligations and the suitability of those running the Exchange.

Should Macquarie, or any owner of the LSE, fail to meet these criteria the FSA could withdraw its official recognition of the bourse and, in effect, prohibit it from trading.

The Exchange and its two major shareholders - Threadneedle and Scottish Widows - have dismissed Macquarie's offer of 580p a share as too mean. They insist London is the natural home for the world's first global exchange and Macquarie is trying to deprive LSE shareholders of the chance to participate in its development.

Shareholders have until 14 February to accept the offer.