LSE seals takeover of LCH.Clearnet but at lower price

The London Stock Exchange has cut its offer for a 60 per cent stake in trans-
atlantic clearing house LCH.Clearnet by a quarter to €366 million (£300m) to reflect new capital requirements.

The companies said on Monday they agreed a new price of €15 a share, valuing LCH at €610m after estimating that new European rules on clearing houses could require LCH to raise €300m of additional capital next year.

Analysts said the lower offer meant the LSE would claw back most of the cost of the new rules, which are meant to protect clearing houses from the impact of a major customer defaulting.

“Today’s announcement is a success for LSE shareholders,” Peter Lenardos, analyst at RBC Capital Markets said in a note. “We believe that shareholder approvals will be sought in January and we still expect the transaction to complete in the first quarter of 2013.”

Shares in LSE hit a four-year high of 1,123p last week on consolidation hopes after commodities and energy exchange Intercontinental Exchange said it had agreed to buy NYSE Euronext for $8.2 billion (£5bn).