The London Stock Exchange (LSE) is modifying its opposition to the merger between London Clearing House (LCH) and Clearnet, the CCP owned by rivals Euronext, under the influence of new chairman Chris Gibson-Smith. Or so claims a report in today’s Financial Times.
LSE had greeted news of the merger this summer with undisguised hostility, threatening to move its business elsewhere, and rejecting an offer of a board seat at LCH.Clearnet, on the grounds that the merger gave Euronext undue influence over the provider of clearing services to its SETS order-driven market and might be able to extort more favourable pricing than LSE through its 41.5 per cent shareholding in the merged entity.
But the Financial Times reports today that LSE is likely to take up its board seat, and that it is satisfied with the assurances it is getting in detailed discussions with LCH on how the CCP services will operate after the merger is complete.
Inevitably, any rapprochement will be interpreted as a possible prelude to a merger between LSE and Euronext, perhaps sparking a counter-bid from Deutsche Borse.