Stock Exchange faces bidding war

The London Stock Exchange is facing a possible bidding war after receiving its second takeover approach in a week yesterday.

Paris-based rival Euronext made an approach just a week after the LSE said it had knocked back a £1.35 billion offer from Germany's Deutsche Boerse.

LSE said talks with both companies would continue.

In relation to Euronext, it said: "The approach is at an early stage and, therefore, does not require a response at this point."

The LSE is Europe's biggest stock market and one of the world's oldest exchanges, with stocks worth a total of £1.4 trillion.

More than 300 firms worldwide trade on the LSE, which last year handled more than 59 million transactions an average of 234,000 trades a day.

There has been extensive speculation about a possible takeover of the much sought-after company since an attempted merger with Deutsche Boerse failed in 2000.

Pan-European stock exchange Euronext was formed in 2000 through the merger of the Amsterdam, Brussels and Paris exchanges. Nearly 1,400 companies, a quarter of them foreign, are listed on the exchange.

It is seen by some analysts as a more natural fit with LSE.

In 2002 it acquired London-based international derivatives market Liffe.

Euronext is not expected to make a formal offer until the new year.

Deutsche Boerse is reportedly planning to fight back by offering senior posts on the board of a merged organisation to the LSE's management team, including chief executive Clara Furse and finance director Jonathan Howell.

It is thought to be reassuring users and management that it would operate the London market as a British business.