TCI Fund Management, a London-based hedge fund which owns more than five per cent of Deutsche Börse has called on the German exchange to ditch its £1.35bn bid for the London Stock Exchange.
TCI says the price of 530 pence per share proposed by Deutsche Börse for the acquisition of LSE "exceeds the potential benefits of this acquisition". TCI wants Deutsche Börse to consult shareholders about the proposed acquisition as well as to discuss whether the exchange should concentrate on buying back its own shares instead.
Deutsche Börse says it received a request on Saturday from TCI to call an extraordinary general meeting (EGM) to vote on replacing the exchange's entire supervisory board and discuss a share buy-back.
In a statement Deutsche Börse says the executive will discuss TCI's request with the supervisory board but remains convinced that its cash acquisition of LSE is in the best interests of its shareholders and the company.
According to a report by the Financial Times, US-based hedge fund Atticus Capital - which controls about two per cent of Deutsche Börse's shares also opposes the proposed acquisition of LSE.
David Slager, who manages the European fund atAtticus Capital, says if the Deutsche Börse was purely motivated by shareholder interests, it would put the acquisition to a vote. Slager also believes that the exchange would deliver better returns for shareholders by buying back its own shares.
The LSE rejected a £1.35 billion cash bid from Deutsche Börse in December, but agreed at the time to continue to hold discussions with the German exchange that could lead to an improved deal. The LSE later confirmed that it had received a preliminary approach from Euronext, although details of an offer have not yet been disclosed.