LSE surges as ICE confirms considering offer

London Stock Exchange shares surged after Intercontinental Exchange confirmed it was considering making a bid for the UK exchange to rival Deutsche Boerse’s.

ICE, which owns the New York Stock Exchange, said no approach has been made yet.

“There can be no certainty that any offer will be made, nor as to the terms on which any offer will be made. A further announcement will be made as appropriate," it said.

LSE confirmed it had not received a proposal from ICE.

“There can be no certainty that an offer will be made or as to the terms on which any offer might be made,” the company said on Tuesday.

It added that discussions with Deutsche Boerse regarding a potential merger of equals continue to progress and said it would update the market as appropriate.

The Wall Street Journal reported on Tuesday that CME Group, which operates the Chicago Mercantile Exchange, was also mulling a takeover bid for LSE.

“Those buying into LSE are hoping that a bigger US appetite for LSE’s operations will be rewarded with an even higher offer than the £20bn merger of equals with DB that is currently on the table and which would result in the biggest exchange in Europe; a genuine rival to US markets,” said Mike van Dulken, head of research at Accendo Markets.

“A transatlantic transaction involving such a chunk of the global equities market would be sure to face significant regulatory hurdles of its own, especially for ICE given its existing London presence. Then again, while the industry has shown cyclical and almost seasonal interest in continued consolidation over the years, could US efforts merely be an attempt to thwart DB’s efforts and keep things just as they are,” he added.

Last week, LSE and Deutsche Boerse confirmed they were in discussions about a potential merger.

Under the terms of the potential deal, LSE shareholders would receive 0.4421 new shares in exchange for each LSE share and Deutsche Boerse holders would get one new share in exchange for each DB share.

This would mean Deutsche Boerse shareholders would hold 54.4% while LSE shareholders would have a 45.6% stake in the combined group.

LSE said at the time: “The boards believe that the potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group.”

At 1234 GMT, LSE shares were up 8.4% to 2,902p.