EURONEXT, the continental exchanges operator, has been cleared to bid for the London Stock Exchange by the Competition Commission.
The regulator yesterday published the conditions the company had to meet before making a formal bid. Euronext has been in talks with the LSE for more than a year but the Commission has been considering a ruling since last spring.
As expected, Euronext has to weaken its links with the clearing service that acts for London equities. The conditions are not regarded as onerous by Jean-François Théodore, the Euronext chief executive.
A greater obstacle to a bid is the LSE share price. After strong gains in recent weeks the share price rose 14½p to 774p yesterday.
The LSE is already facing a £1.5 billion, 580p-a-share formal offer from Macquarie, the Australian bank. However, this offer has been rejected and has little chance of succeeding unless it is substantially raised.
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Euronext would not comment. It must wait until the end of the final consultation period, probably in a fortnight’s time, before making a formal offer. But there is some scepticism in the market that an offer will be forthcoming.
Hedge funds speaking for a quarter of Euronext shares have said they will oppose a formal approach for London. Some prefer a link with Deutsche Börse in Frankfurt, an earlier bidder for the LSE that had to drop out after its own shareholder revolt.