Rival exchange eyes "opportunities" from LSE merger as European opposition grows

William Turvill
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Euronext today reported its most profitable quarter since it went public in 2014 (Source: Getty)

The head of pan-European exchange group Euronext has told of the growing opposition to the tie-up between the London Stock Exchange and Deutsche Boerse.

Speaking to City A.M. as Euronext reported its best quarterly profits since it went public in 2014, chief executive Stephane Boujnah also indicated that his company is monitoring the situation to see “whether some opportunities can come out” of the deal.

Euronext has been linked with parts of the LSE group, such as Clearnet and Borsa Italiana.

Read more: Deutsche Boerse wins shareholder approval for London Stock Exchange merger

The governments of France, Belgium, Portugal and now, according to Boujnah, Netherlands have expressed concern over the deal to the European Commission.

Regulators and politicians in Germany are also concerned about the terms of the deal, which would mean the joint company has a London headquarters.

“The point-of-views of Euronext are just one part of the equation, but you’ve seen that the government of France, the government of Portugal, the government of Belgium and, to the best of my understanding, even very recently the government of Netherlands… have expressed their views.

“So it’s not a French issue, it’s not a Euronext issue.”

Asked how the tie-up would affect Euronext, Boujnah said: “Now the deal has been approved by the shareholders, it’s in the hands of regulators in Brussels and Frankfurt.”

He added: “They all have to form their views as to whether or not the deal is consistent with the interests they have to defend and in particular whether Brexit is changing… the transaction.

“We monitor the situation closely, and we’ll see whether some opportunities can come out of this transaction that can contribute to the development of Euronext.”

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

Euronext today reported a net profit of €49.3m for the second quarter of 2016, up 72 per cent on the same period last year.

Its revenue for the three months was up 1.7 per cent to €132.3m. Earnings per share, meanwhile, were up 73 per cent to €0.71.

On the subject of the UK’s Brexit vote, Boujnah said: “At a time of doubt and uncertainty in Europe and the European project, Euronext – with its headquarters in Amsterdam, its operational headquarters in Paris, a Dutch chairman, a French CEO, an Italian CFO, et cetera, and a British head of sales – are demonstrating that we can be significantly more efficient than other projects. There are European projects that do work, very efficiently with a very strong profitability.”