Majority of LSE Investors Likely to Approve Deutsche Börse Merger -- 2nd Update
30 June 2016 - 6:29PM
Dow Jones News
By Eyk Henning
FRANKFURT -- The vast majority of shareholders in London Stock
Exchange Group PLC have indicated they are voting in favor of the
roughly $30 billion merger with Deutsche Börse AG, people familiar
with the matter said.
Shareholders controlling well over 75% of LSE shares have
instructed proxy advisers to vote in favor of the deal at a special
shareholder meeting on Monday, these people said.
LSE shareholder approval has been widely expected and would be
in line with what two large proxy advisers recommended. LSE
declined to comment.
Analysts and investors say that following Britain's vote last
week to leave the European Union, LSE now has more to gain from a
tie-up because it would allow the exchange to retain a foothold in
the bloc.
Assent from LSE investors would shift focus to Deutsche Börse's
ongoing tender offer, which ends on July 12. More than 75% of the
German company's shares must be tendered for the transaction to go
ahead.
Several large Deutsche Börse investors have told The Wall Street
Journal they had not yet decided whether to tender their
shares.
German politicians and the country's financial watchdog, BaFin,
have said recently they would oppose the merger under its proposed
structure, which foresees both exchanges being owned by a
London-based holding company. The German officials said basing the
merged company in London, which will be outside the EU and its
regulatory regime, would be unacceptable.
"It is hard to imagine" that the most important exchange
operator in the eurozone would be steered from a headquarters
outside the EU, BaFin President Felix Hufeld said Tuesday.
To save the deal, LSE would probably need to agree to relocate
to the EU, people close to the transaction said.
Should the deal fail, Intercontinental Exchange Inc. could make
another approach to buy LSE. The owner of the NYSE in May said it
wouldn't bid for LSE, but said it could come back should the
European tie-up fall through.
Deutsche Börse's chief executive also speculated last month that
Deutsche Börse could become a target for CME Group Inc., another
big U.S. rival. Such a scenario would leave Europe's largest stock
operators in the hands of U.S. bellwethers.
The tender offer for Deutsche Börse shares also faces the
intricacies of German takeover laws. At least 14% of the exchange
group's capital is held by index funds, according to calculations
by the Journal. Those investors often tender only after an offer is
complete because of internal rules.
--Madeleine Nissen in Frankfurt and Nick Cave in London
contributed to this article.
Write to Eyk Henning at eyk.henning@wsj.com
(END) Dow Jones Newswires
June 30, 2016 13:14 ET (17:14 GMT)
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