LSE’s Rolet passes key LCH takeover test

City A.M. Reporter
LONDON Stock Exchange (LSE) boss Xavier Rolet passed a crucial test of his leadership yesterday when his shareholders backed the takeover of clearing house LCH.Clearnet, his first major deal.

LSE and LCH.Clearnet shareholders voted overwhelmingly to ratify Rolet’s plan to take up to 60 per cent of the clearing operator with an offer of €20 per share, which values LCH.Clearnet at €813m (£510.8m).

Over 99.9 per cent of LSE shareholders backed the LCH deal at an extraordinary general meeting yesterday while 94.3 per cent of LCH shareholders gave their approval at a separate EGM.

The support leaves the deal needing only regulatory and competition authority clearance before it can be completed, something the partners plan to do in the fourth quarter of this year.

The deal is seen as crucial for Rolet after his attempt to scoop up Canadian exchange TMX fell through last year after the target’s shareholders opposed the deal.

LCH is also vital for the LSE as the Anglo-French clearing house will boost its clearing revenue overnight and position the LSE to profit from regulatory changes in the fast-growing market for over-the-counter (OTC) derivatives.

Clearing houses work to cut the risk of trading on exchanges by guaranteeing each side of the transaction, minimising losses for members if a counterparty goes bust.