LCH.Clearnet to raise 300 mln stg, Nasdaq to up stake - report

Wed Feb 27, 2013 4:49pm EST

Feb 27 (Reuters) - LCH.Clearnet will raise 300 million pounds ($454 million) through a capital raising in the coming days that is expected to see exchange operator Nasdaq OMX Group raise its minority stake in the trans-Atlantic clearing house, Sky News reported on Wednesday.

LCH Clearnet is in advanced stages of finalising the fund-raising as part of a takeover deal by the London Stock Exchange Group, Sky News said on its website.

The LSE plans to pay 366 million euros ($479.8 million) for 60 percent of LCH, which as a clearing house makes its money by acting as a middle man in financial trades and guaranteeing to complete deals if one of the parties involved can't.

The deal offers the LSE diversification from its equities base into the many debt and currency markets in which LCH operates, but the exchange has already cut its offer price after estimating that regulatory demands could require LCH to raise 300 million euros in additional capital this year.

The two parties last month set a deadline giving themselves until Thursday to finalise detailed terms of a deal and Sky News said the companies are on the brink of an agreement even though they could still miss the deadline.

LSE Group and LCH declined to comment.

As part of the deal, yet to be finalised as of Wednesday afternoon, Singapore Exchange operator SGX could potentially snap up a minority shareholding, while Nasdaq was also in talks to raise its minority stake in the business, Sky News said.

Nasdaq declined to comment. SGX could not be reached for comment outside regular business hours.

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