LSE eyes Liffe exchange

September 28, 2001 Posted: 1308 GMT

LONDON (CNN) -- The London Stock Exchange has said it may bid for Europe's third biggest derivatives exchange, the LIFFE futures and options market.

The LSE confirmed months of speculation by saying it had approached its neighbour, the London International Financial Futures Exchange

The 200-year-old LSE has long been searching for a suitable partner and has been touted as a potential bidder for LIFFE, the world's biggest electronic exchange that handles contracts on everything from shares and coffee to wheat and potatoes, Reuters reported.

LIFFE said in a statement it had appointed investment bank Credit Suisse First Boston to help it evaluate several approaches that had been made and said it would make a further announcement in due course.

The LSE has been keen to achieve a scale of economies to allow it to see off aggressive European competitors. The bid for LIFFE is the first strategic move since it floated its shares in July as a way to raise what it called "acquisition currency."

Exchanges around Europe are using alliances and mergers to expand outside their home markets and attempting to offer investors cheaper, more efficient cross-border equity trading, Reuters said.

The LSE has been looking to its next move in the race to form a single European stock market, since its proposed merger with Frankfurt's Deutsche Boerse collapsed last year.

In July, the London Stock Exchange became the third and biggest European stock market to list its own shares.

LSE faces competition for LIFFE

Others who could make a move on LIFFE, valued at around $470 million, include Euronext the merged Paris, Brussels and Amsterdam exchange, a source familiar with the talks told Reuters. Euronext had no comment.

Analysts said Germany's Deutsche Boerse, New York's Nasdaq, the Chicago Board of Trade and pan-European equity market Virt-x could also be interested in LIFFE, Europe's largest derivatives exchange by value of trade.

Sweden's OM, which launched an unsuccessful bid for the LSE last year, ruled itself out. UK broker Garban Intercapital holder of a five percent stake in LIFFE, has also dismissed suggestions it was a bidder.

LIFFE Chairman Brian Williamson said his exchange had evolved into the most technologically advanced in the world, and its trading system was in increasing demand. LIFFE reported record trading volumes in August, handling an average £364 billion (588 billion) a day.

"We are not surprised to have received a number of approaches. We will, therefore, review each approach to see if it can maximise value for our shareholders," Williamson said in a statement.

	Want the full story? Search for free company info...
	Enter Company Name:-