Deutsche Boerse lowers shareholder approval threshold for London Stock Exchange deal

 
William Turvill
Follow William
Frankfurt Stock Exchange
The London Stock Exchange and Deutsche Boerse agreed a £21bn merger in March (Source: Getty)

Deutsche Boerse today lowered the shareholder approval threshold for its London Stock Exchange merger and extended the deadline for acceptance.

The German stock exchange will now require 60 per cent backing from investors, rather than 75 per cent.

The deadline for acceptance, meanwhile, has been extended by two weeks, from 12 July to 26 July.

Read more: Deutsche Boerse tells German MPs: Merged stock exchange will have EU HQ

11 July 2016 @ 1:15pmLondon Stock Exchange Group (LSE)

The company expressed concerns on Sunday that the original threshold may have proven difficult to cross because up to 15 per cent of its shares are held by index funds. These would not be able to accept the offer until the minimum level of acceptances had been reached.

Numis analyst Jonathan Goslin said the move may imply there is less support among Deutsche Boerse shareholders than LSE investors, 99.89 per cent of whom approved the deal last week.

“I think it’s just a technical procedure they’re going through. However, it is interesting because, looking at the unanimous vote from LSE shareholders, there wouldn’t have been a problem whatsoever,” he said.

“So it does maybe imply that they’ve been given some guidance that it may be a little bit close, so therefore they need to have this buffer in place to ensure that they can still [obtain] the required shareholder approval.”

Read more: London may lose, or share, merged stock exchange HQ after Brexit – sources

Gregor Pottmeyer, Deutsche Boerse's chief financial officer, said: "With this step we respect the technical barrier of 15 per cent of our shareholders, namely index funds, which are not able to tender their shares prior to the replacement of the untendered shares by the tendered shares in the respective index.

"Deutsche Boerse will adjust the index calculation for its blue chip index Dax two days after the 50 per cent threshold is exceeded.

"This change in procedure is a purely technical one. We are confident that we will reach the 75 per cent threshold in the course of the full tender process."

Related articles