THE Office of Fair Trading will decide within a week whether to send the rival bids for the London Stock Exchange to Brussels for a lengthy examination by competition authorities.
Alternatively, the OFT could clear the offers or send them to the UK Competition Commission.
Neither Euronext nor Deutsche Börse are commenting, but both are braced for the matter to be sent to Brussels, which some competition lawyers believe will be the most likely outcome. “It’s really difficult to call,” said one source involved in the negotiations.
The prospect of a lengthy examination by the European Commission, which will delay any resolution of the auction until the autumn, was raised by Jean-François Théodore, the Euronext chief executive, last week when he announced details of any eventual bid by his company, which operates four continental exchanges.
Meanwhile, his counterpart at the Börse, Werner Seifert, will this week meet Clara Furse, the LSE chief executive, to try to accelerate the Börse’s own bid. Valuing the LSE at £1.3 billion, this is conditional on the London exchange’s board accepting it and has twice been rejected.
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It is understood that the meeting, which is expected to take place on Thursday, is at the request of the LSE.
M Théodore will spend this week in the US, meeting his main American shareholders. Euronext has said it will not reveal the price at which it is prepared to bid until the competition issues are resolved.
The OFT has until Friday to make a decision on the Euronext bid and until Monday to rule on the Börse. If the potential offers for the LSE are sent to Brussels, there are two levels of inquiry under EU law. A more cursory examination, possibly imposing various conditions on the bidders in the event of a takeover, would allow the bid timetable to start ticking and Euronext to unveil its offer, perhaps accompanied by a higher bid from the German exchange.
There have been calls, however, for the bids to be subjected to detailed examination by Brussels. A lengthy “phase two” inquiry would run throughout the summer.
There is particular concern over the Börse’s approach because it owns clearing and settlement as well as equities trading in its home market in Frankfurt, a business model widely disliked in London.