ICE may have more time to consider bid for London bourse

Mon May 2, 2016 1:13am EDT
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By Sophie Sassard and Huw Jones

LONDON (Reuters) - London Stock Exchange Group and Deutsche Boerse may have to delay a vote on their proposed merger until after Britain's EU referendum, handing more time to Intercontinental Exchange (ICE.N: Quote) to decide whether to make a counter-bid for the British bourse.

LSEG had been expected to hold a special shareholder meeting to approve the merger with Deutsche Boerse before Britain votes on June 23 on whether to quit the EU.

ICE would have to file any counterbid seven days before that meeting - with Britain's future in the European Union still very much in doubt. For American ICE, the London Stock Exchange would be a more attractive target within the European Union.

Deutsche Boerse still needs to file a full set of merger documents with its German regulators, a convoluted process that probably cannot be done now before the referendum date.

Sources familiar with the matter say LSEG may delay its shareholder meeting until this process is completed to ensure regulators are happy, though no decision has been taken and LSEG may still move early.

The London bourse could also risk a backlash among its investors by asking them to vote on the Deutsche Boerse deal before a possible Brexit, even though the two European exchanges have presented their proposed deal as "Brexit" proof given their combination would straddle the EU and Britain, should it leave.

If the pair wait until after the referendum to try to seal their all share "merger of equals", uncertainty over Britain's future will have been removed. ICE will have more time to come up with a rival bid and win the backing of its shareholders.

Departure from the bloc would create upheaval for London, Europe's biggest financial center where trillions of pounds of day-to-day business runs on EU rules.   Continued...

A screen displays the ticker symbol and trading information for Intercontinental Exchange Inc. (ICE) at the post where it is traded on the floor of the New York Stock Exchange (NYSE) March 1, 2016. REUTERS/Brendan McDermid