London Stock Exchange reduces LCH.Clearnet offer as costs rise

Michael Bow
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THE London Stock Exchange is renegotiating its original offer for clearing house LCH.Clearnet after new European regulations increased the cost of buying the company.

LCH.Clearnet, which grew out of The London Clearing House established in the City in 1888, had agreed to accept an offer from the LSE in the region of €460m (£373m), or €18 a share, back in April after several months of negotiations.

But incoming regulations from the European Securities and Markets Authority and the European Banking Authority adopted yesterday are set to increase the capital buffers LCH.Clearnet needs to hold, shifting the costs onto the LSE once a deal is completed.
Yesterday both firms said they were discussing “potential changes to the commercial terms of the transaction”.

It is thought the LSE has reduced its offer to €13 a share, or €312m in total. The new offer will need to be backed by shareholders and management.