London - Arabstoday
London Stock Exchange Group Plc (LSE) rallied the most in more than eight months after agreeing to buy a majority stake in LCH.Clearnet Group Ltd. for 463 million euros ($613 million). Shares in the owner of Europe’s oldest independent bourse climbed 7.8 percent to 968 pence at 9:10 a.m., the biggest increase since June 30, valuing the exchange at 2.63 billion pounds ($4.2 billion).LCH.Clearnet shareholders will receive 19 euros a share in cash plus 1 euro a share from a special dividend for a stake of as much as 60 percent, LSE said in a statement today. The offer values the world’s biggest swaps clearinghouse at 813 million euros, according to the statement. LCH.Clearnet shareholders, which include banks and brokers that use its services, will retain ownership of at least 40 percent of the company. “This deal broadens the income profile of the LSE and builds scale amongst the consolidating world of exchanges,” James Hamilton, analyst at Numis Securities Ltd. in London, wrote in a report today. “All of the major banks will remain shareholders post deal which is likely to make them inclined to continue to provide LCH with business.\'\' LSE has been in talks with the London-based clearinghouse for more than six months. LCH.Clearnet had also attracted interest from Nasdaq OMX Group Inc. (NDAQ) and NYSE Euronext, which planned to bid in partnership with Markit Group Ltd. Increasing Competition ‘‘This gives us access to global clearing opportunities,’’ LSE Chief Executive Officer Xavier Rolet said on a conference call today. ‘‘This empowers the group to offer new products to innovate and provide a more competitive environment for listed derivatives.’’ LCH.Clearnet, whose SwapClear service began clearing interest-rate swaps traded between banks in 1999, has seen its market share in equities eroded by new entrants. Its biggest customers, such as NYSE Euronext (NYX) and the London Metal Exchange, are considering clearing their own trades and two chief executives have departed in less than six years. Clearinghouses such as LCH.Clearnet and Deutsche Boerse AG’s Eurex Clearing operate as central counterparties for every buy and sell order executed by their members, who post collateral, reducing the threat from a trader’s default. The businesses have become more attractive as regulators globally seek more central clearing of derivatives.