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LSE plans July float

May 24, 2001
Web posted at: 1212 GMT

LONDON (CNN) -- The London Stock Exchange said on Thursday it plans to float by the end of July on its own market, giving it currency to pursue acquisitions.

The 200-year-old exchange, which is expected to have an estimated price tag of 1.2 billion pounds ($1.71billion), will ask shareholders to abolish a 4.9 percent cap on share ownership to ease trading.

"I am determined that the Exchange should seize opportunities presented by its position in that market," Chief Executive Clara Fuse said. "If that means actively pursuing corporate deals, that is what we will do."

LSE shares, which are closely held and traded through investment bank Cazenove, closed at £33.60 on Wednesday, valuing the exchange at around £1 billion. Shares rose 4.2 percent to 3,500 pence in midday trade.

No new money will be raised through the floatation, the LSE said.

European stock markets are under pressure from institutional and retail investors to merge, thereby slashing the cost of trading and offering more stocks through one exchange trading platform.

Fought off Swedish bid

The LSE fought off a hostile bid from Sweden's OM Gruppen last year, and was forced to jettison its proposed merger with Frankfurt's Deutsche Bourse to focus on its defence.

"People are looking for a purpose from the LSE. One has to list with a purpose because if you don't you are prey to hostility," Angela Knight, chief executive of APCIMS, the private retail client broker association which derailed last year's planned merger with Germany's Deutsche Boerse, told Reuters.

"You've got Deutsche Boerse with a big war chest already, Euronext raising another big war chest, and there are other entities. The LSE is in the limelight and is right to come to market but needs to come with a strategy," she said.

The Deutsche Boerse raised some 1 billion ($940 million) from its initial public offering in February, while Euronext, formed through the merger of the Paris, Amsterdam and Brussels stocks exchanges, also plans to float this summer.

LSE Chairman Don Cruickshank told CNN that the exchange would expand its "scope and scale" through technology and trading system tie-ups.

He added the LSE was still talking to exchanges in the U.S. to form a global partnership, but at present wasn't clear on what institutions really wanted from a round-the-clock trading system.

The LSE is Europe's biggest stock exchange measured in terms of the value of companies listed on it. According to the Federation of European Stock Exchanges, the LSE is valued at 3 trillion compared to Euronext's 2.6 trillion and Deutsche's 1.5 trillion.