Intercontinental Exchange, the owner of the New York Stock Exchange, is considering a bid that could halt a £20 billion merger between the London Stock Exchange and its German rival.
ICE, which owns 23 exchanges across the US, Canada and Europe, confirmed this morning that it was considering an offer for the London exchange.
Although ICE said there was no certainty that an offer would be made, hopes of a bidding war lifted shares in the London Stock Exchange rose more than 7 per cent to an all-time high of £28.70 in late afternoon trading.
Mike van Dulken, the head of Research at Accendo Markets, said: “Those buying into LSE are hoping that a bigger US appetite for LSE’s operations will be rewarded with an even higher offer than the £20bn merger of equals with Deutsche Börse that is currently on the table and which would result in the biggest exchange in Europe; a genuine rival to US markets.”
The London Stock Exchange said that it had not received a proposal from ICE and that discussions with Deutsche Börse were continuing.
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Ever since the proposed merger with Deutsche Börse was announced, there has been talk that others could make a bid.
The CME Group, which is comprised of the Chicago Mercantile Exchange, the Chicago Board of Trade, the New York Mercantile Exchange and Comex, is said to be working on a deal for the LSE, Bloomberg reported.
Under the terms of the all-share Deutsche Börse deal, investors in the London exchange would be minority owners of the enlarged group, with 45.6 per cent of the shares. Deutsche Börse shareholders would have 54.4 per cent of the new company. Both boards have backed the merger, describing it as an industry-defining deal, pointing to the benefits of putting Europe’s two largest stock market operators together.
Analysts pointed out that any bid from ICE would face significant regulatory hurdles, given its existing London presence. ICE owns The London International Financial Futures and Options Exchange, which it aquired when it bought NYSE Euronext.
Mr van Dulken said that ICE’s interest “could merely be an attempt to thwart Deutsche Börse’s efforts and keep things just as they are”.
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Shares in ICE fell nearly 4 per cent — or $8.45 — to $230 in early trading on the New York Stock Exchange.