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NYSE, Nasdaq, LSE bid for top EU clearinghouse

Washington, May 28, 2011

European clearinghouse LCH.Clearnet confirmed on Saturday it has received a string of offers from exchange operators interested in pursuing some form of business tie-up but said talks were still at an early stage.

On Friday a source told Reuters that NYSE Euronext, Nasdaq OMX Group and London Stock Exchange Group had made bids for LCH in the last two weeks, after the clearer decided to consider its strategic alternatives.

In a statement LCH, Europe's largest independent clearinghouse, said it has 'received various proposals indicating an interest in pursuing some form of possible business combination or other cooperation.'

Noting press speculation the group said considerations were at a preliminary stage and there was no certainty of a deal.

On Friday, the Financial Times reported that the bids ranged from 350 million to 1 billion euros ($1.43 billion), and were made at a board meeting, citing three sources familiar with the matter.

LCH - owned by a number of banks and other market participants, and the target of bids in the past - has made no final decision on selling, the first source said.

The three exchanges declined to comment on the reports.

Clearinghouses, which stand between parties to a trade to guarantee obligations if there is a default, have entered the spotlight since the 2007-2009 financial crisis.

Legislators and regulators want to run as many private derivatives as possible through the clearers to stabilize the financial system.

Meanwhile the exchanges are in midst of perhaps industry's largest consolidation wave ever, with NYSE Euronext set to merge with Germany's Deutsche Boerse and the LSE planning to combine with Canada's TMX Group.

A Nasdaq counterbid for NYSE failed earlier this month. While NYSE Euronext has a stake in LCH, its merger partner, Deutsche Boerse already runs its own clearinghouse called Eurex.

The Big Board parent teamed with privately-held financial information company Markit to bid nearly 500 million euros for LCH, the first source said.

LSE's offer is valued at 1 billion euros, while Nasdaq's offer is worth 350 million euros, the FT report said, citing separate sources.-Reuters




Tags: NYSE | LSE | Nasdaq | Bid | EU clearinghouse | LCH.Clearnet |

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