LONDON The London Stock Exchange (LSE) (LSE.L) has set a date for shareholders to vote on the group's planned takeover of LCH.Clearnet just a week after agreeing to buy the European clearing house.
The LSE, which entered exclusive talks with LCH in late September last year, said in a regulatory statement on Friday it had called a shareholder meeting to approve the LCH deal on April 3 in London.
The announcement came a week after the British exchange said it planned to take up to 60 percent of the clearing operator, offering shareholders 20 euros per share, which values LCH at 813 million euros ($1.08 billion).
"LSE shareholders will likely back it and major LCH bank shareholders have indicated they will support it so I expect them to get this done," said Richard Perrott, an analyst at Berenberg Bank.
The deal is seen as crucial for LSE Chief Executive Xavier Rolet whose attempt to scoop up Canadian peer TMX fell through when shareholders nixed the C$3.6 billion ($3.62 billion) acquisition last year.
"The LCH deal is important, not least because there are relatively few viable targets out there, and none that offer so much exposure to the OTC markets," said Perrott.
The LSE differs from most of its rivals in not owning the clearing house for its main market, which has become more of a problem as clearing is becoming an ever more attractive area, while trading revenues are faltering.
But the LSE, like its rivals, is looking to position itself to benefit from regulatory changes that will see vast swathes of the vast over-the-counter (OTC) derivatives markets move to clearing houses, like LCH.
Clearing houses sit between trading firms, acting as a central counterparty that reimburses companies on losses resulting from the default of a trading partner, like Lehman Brothers in 2008, or MF Global last year.
(Editing by David Cowell)