Bank to join race for LSE takeover

AUSTRALIAN group Macquarie Bank is understood to be preparing a bid for the London Stock Exchange.

The move comes as the Exchange awaits the outcome of a Competition Commission inquiry into takeover approaches by French group Euronext and Deutsche Borse.

Any offer made by Macquarie Bank, which has yet to make a formal approach, would have to be in excess of the 530p a share or £1.35 billion (€1.97bn) which was already put forward by Deutsche Borse last year and rejected. The LSE is understood to be demanding at least 600p a share or £1.5bn (€2.2bn).

Shares in the LSE closed up 9p at 552p on Friday on the back of rumours of a potential new suitor.

Macquarie typically focuses on property and infrastructure such as roads and airports, but the acquisition of the LSE would fit its model of buying a monopoly business with solid earnings streams and the potential to increase fees, according to the Sydney Morning Herald.

Macquarie is seen to be keen to expand its European interests further.

It has already invested an estimated £3bn (€4.38bn) in Britain, with interests ranging from South East Water to stakes in the Isle of Wight ferry company Wightlink and Bristol Airport.

The Competition Commission said last month that the takeover of the LSE by its two rival operators would “substantially lessen competition.”

It provisionally found that a merger with either Deutsche Borse or Euronext would make it more difficult for other exchanges to compete with the LSE in the trading of equities.

However, a bid from Macquarie would not be hampered by monopoly worries.

Deutsche Borse has already pulled out of the running, but Euronext is understood to be waiting for the outcome of the Competition Commission’s inquiry before putting a price on its interest.

Meanwhile, it was also reported that OM Gruppen, the operator of the Swedish Stock Exchange, was also considering making a new offer for the LSE.

The Stockholm exchange had already made a failed bid for its London counterpart in 2000.

Nobody from the LSE was available to comment.