LCH.Clearnet swept up in global exchange M&A battle

Independent clearing house LCH.Clearnet has emerged as a prized asset for global exchanges gripped by M&A fever, with the clearer confirming that it has received numerous takeover or merger approaches over the past six weeks.

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LCH.Clearnet swept up in global exchange M&A battle

Editorial

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Responding to press speculation at the weekend that it was considering multiple bids from the LSE, Nasdaq and Nyse, LCH.Clearnet stated that it has received "various proposals indicating an interest in pursuing some form of possible business combination or other cooperation with LCH.Clearnet".

The brief statement continued: "LCH.Clearnet's considerations are at a preliminary stage and there can be no certainty that these proposals will result in any transaction."

The clearer has been the subject of M&A speculation before, fending off separate bids from New York's Depository Trust and Clearing Company and an Icap-led consortium approach. More recently, the clearer is rumoured to have rebuffed an unsolicited $400 million bid from InterContinentalExchange.

The London Stock Exchange has denied rumours that it had tabled a EUR21 a share bid for the clearer, valuing the business at EUR1 billion. The LSE has issued a statement saying that it "is not engaged in any discussions with LCH regarding a possible transaction".

The LSE's statement has deflected attention to Nyse Euronext and arch-rival Nasdaq, although neither exchange has yet to declare an interest.

City gossip suggests that Nyse is working with financial data house Markit to fashion a deal that would give it control of LCH.Clearnet's much-prized SwapClear business and a foothold in OTC derivatives clearing. Nasdaq OMX has similar motivations for striking a deal, as its own International Derivatives Clearing Group operation struggles to gain traction in the over-the-counter markets.

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Comments: (1)

Gary Wright

Gary Wright 

Any vertical silo attempting to buy LCH Clearnet will not be doing the industry much good. The need is for horozontel Clearing that obviously needs the Clearing houses to unify. Any vertical will just increase costs , risks and complexity.

No doubt we will discuss these issues and more on the 23rd June at the first Post Trade Forum debate hosted by the London Stock Exchange

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