Swiss bourse preparing bid for virt-x

Virt-x, which was formed by the merger of Tradepoint and the Swiss stock exchange, looked as though its days as an independent entity were numbered yesterday after its largest shareholder indicated it was ready to swallow the fledgling electronic stock market.

The Swiss Exchange Group (SWX), which owns 38.9 per cent of virt-x, is likely to offer about 12.5p a share, valuing the company at £34.9m.

The move by SWX, which is an offshoot of the main Swiss stock exchange, is thought to be an attempt to grab more market share and comes as the major stock markets around the world are merging with rivals in an effort to dominate the share trading and settlement market.

The biggest Swiss companies, including Novartis and Nestlé, trade on virt-x, which was set up last year when the Swiss stock exchange, Europe's fourth-largest bourse, merged with Tradepoint, the London-based electronic market. The company aimed to revolutionise European share dealing by offering cross-border trading at domestic prices.

But recently virt-x lost its founding chief executive, Antoinette Hunziker-Ebneter, and it said it would halve the number of shares tradable on its screen-based system after a review of prospects for cross-border dealing.

One analyst commented "this is really them pulling the plug" and "it brings SWX closer to Deutsche Börse".

Juerg Spillmann, head of the SWX executive committee, said: "That is definitely not the case. It is a strategic move, we are not pulling the plug."

SWX already has close ties with Deutsche Börse through its joint ownership of the Frankfurt-based derivatives exchange Eurex and both have a stake in Stoxx, the pan-European indices firm.

European exchanges have been consolidating around the London Stock Exchange, Deutsche Börse and Euronext, the Paris-Amsterdam-Brussels bourse body which has recently added Lisbon and the London International Financial Futures Exchange to its portfolio.