LSE starts exclusive talks to take over LCH.Clearnet

THE LONDON Stock Exchange started exclusive talks with LCH.Clearnet yesterday as it closed in on a takeover of the sought-after clearing house.

The announcement confirmed that the LSE is now in pole position to buy LCH, Europe’s last independent clearing house, for about €1bn (£870m).

While both sides remain locked in talks, the likely acquisition would be a coup for LSE chief executive Xavier Rolet, handing him assets such as SwapClear, which clears interest rate swaps, and LCH’s huge over-the-counter derivatives trading arm.

The LSE said it was “pleased to confirm that it has entered into exclusive discussions with LCH.Clearnet regarding a potential transaction.

“Work is focused and on-going, with a view to moving towards an agreement, though at this stage there can be no certainty that any transaction will result,” it said.

A takeover of LCH would boost the LSE’s small but growing Turquoise Derivatives business launched this year and would open new doors to expand into the large and lucrative OTC market. The LSE already owns an Italian clearing house, CC&G, after it bought Borsa Italia in 2007.