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Icap-backed bid rejected again by LCH

CLEARING house LCH.Clearnet has rejected a second takeover offer from a group including Deutsche Bank, HSBC and Michael Spencer&rsquo;s Icap, City A.M. can confirm<br /><br />The 14-strong consortium, known as the Lily Group, which is being advised by Deutsche, has been rejected again after making a &euro;12-per share offer valuing the firm at &euro;887m (&pound;762m), 20 per cent above its initial offer.<br /><br />A source close to Icap said last night it is &ldquo;difficult to see a way forward now&rdquo;, although the consortium is still in discussions with LCH.<br /><br />This came as Spencer&rsquo;s Icap, the world&rsquo;s biggest inter-dealer broker, said it is on track to almost match last year&rsquo;s profits despite the ongoing recession, after a &ldquo;solid&rdquo; first quarter.<br /><br />In a trading update ahead of its annual shareholder meeting, Icap said revenue in the three months to the end of June grew by over 10 per cent, aided by rising bond issuance and active commodities markets.<br /><br />Profit before tax and one-off items for the year to March 2010 is on course to meet the average analyst forecast of &pound;337m, the company said.<br /><br />That figure would be down 2.6 per cent from 2008-09 profit of &pound;346m, although that was up five per cent on 2007-08.<br /><br />Icap said it welcomed plans to strengthen over-the-counter financial regulation &ndash; despite concerns brokers could be hurt by the moves &ndash; saying markets can be made more transparent and robust.<br /><br />The broker added its first quarter was assisted by low short-term interest rates, steep yield curves, the jump in bond issuance and commodities activity.