The London Stock Exchange (LSE) says it has received enough shareholder votes to proceed with its 463 million offer to purchase a 60% stake in LCH.Clearnet, the clearing house for swaps, equity settlement, energy, bonds and repo and futures.
At a general meeting of the shareholders of LCH.Clearnet today, 94% voted to accept LSEs offer with voting 6% against it. The is expected to close in the fourth quarter this year subject to regulatory and other approvals, including anti-trust clearance.
We are delighted that our shareholders have voted to support overwhelmingly our agreement to partner with LSEG, Jacques Aigrain, chairman of LCH.Clearnet, said in a statement today. We look forward to working together to build on our respective strengths as we seek to deliver one of the premier global multi-asset, multi-venue clearing and risk management businesses.
The transaction cost will see LSE paying about 19 per share in cash for LCH.Clearnet. Existing shareholders of LCH.Clearnet will retain the remaining 40% of the clearing house.
The transaction will be transformative, delivering a strong, customer-focused clearing partnership between LSE, LCH.Clearnet and the broker-dealer community, Xavier Rolet, CEO of LSE, said last month. We will seek to promote greater innovation, choice and competition in the listed derivatives market through this new-style open-access clearing model, building on the successes we have already had with our existing equity and fixed income trading partnerships, Turquoise and MTS.”
The deal may deliver cost-saving opportunities for market participants as LSE could promote collaboration between LCH.Clearnet and Cassa di Compensazione e Garanzia (CC&G), the Italian clearing house also owned by LSE.
Given that the LSE already owns CC&G, there are netting and margin efficiencies that could lower the cost of clearing for its members, Tony Freeman, head of industry relations at post-trade processing firm Omgeo, told theTRADEnews.com, sister publication of Global Custodian, last month. Use of margin can be consolidated between the two clearing houses for large brokers that are active in the UK, French and Italian markets and provide an immediate cost benefit.
(CG)