LSE sees acquisition of LCH.Clearnet by March 2013-report

MILAN Sun Dec 16, 2012 7:17am EST

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MILAN Dec 16 (Reuters) - The London Stock Exchange will likely finalise its acquisition of clearing house LCH.Clearnet by the end of March, LSE Chief Executive Xavier Rolet told Italian daily Il Sole 24 Ore on Sunday.

Britain's competition watchdog on Friday gave a green light to the LSE's planned purchase of LCH.Clearnet.

The timing of the deal is still unclear, however, as both parties are back in talks over terms to reflect higher capital requirements being imposed on exchanges by European regulators overhauling the financial system after the banking crisis.

"Capital shortfall for LCH is said to be around 300-375 million euros and it could be even higher, this is why we are in talks to change the terms of the deal," said Rolet, adding he was confident the deal be signed by the end of first quarter 2013.

"We have already put aside the majority of funds we will need," he added.

Under the deal terms agreed in April, the LSE would buy up to 60 percent of the clearing house for 19 euros per share.

However it would also have to pay 60 percent of the capital increase imposed by the European Securities and Markets Authority (ESMA) to LCH.Clearnet. The ESMA may not finalise its demands until early next year.

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