The plot around the London Stock Exchange’s proposed £21bn mega-merger with Deutsche Boerse continues to thicken, with more confusion emerging over when talks between the companies began.
German authorities have opened a criminal probe into Deutsche Boerse chief Carsten Kengeter and are investigating whether negotiations between the companies were under way prior to a €4.5m (£3.9m) share purchase that Kengeter made in December 2015.
The German exchange claims that “only in the second half of January 2016” did the chairmen and chief executives of the companies “agree to begin negotiations for a merger”.
However, City A.M. can reveal that at least one Deutsche Boerse board member was apparently aware that London Stock Exchange chief executive Xavier Rolet had publicly stated that he was open to a merger with a rival up to eight months before Kengeter’s share purchase.
Asked in an interview with City A.M. in June 2016 when the deal was first conceived, Deutsche Boerse board member Jeffrey Tessler said: “I forget exactly when, but Xavier Rolet came out like six months ago or a year – no, over a year ago – and talked about openness for discussions, which probably set off the interaction. I’m not sure exactly the point in time.”
Sources close to the company claim Tessler was referring to a Wall Street Journal interview in which Rolet indicated he was open to deals with rivals. “When there is an industry with competitive tension, consolidation tends to be not too far behind,” Rolet told the WSJ at the time.
Last week, the Public Prosecutor’s Office of Frankfurt searched Kengeter’s office and home in a bid to discover whether the talks stretched back as far as July or August 2015.
Deutsche Boerse declined to comment.