London Stock Exchange Group (LSE) has agreed the terms on a revised recommended cash offer for a majority stake in LCH.Clearnet's issued share capital, which LSE believes 'strongly positions' it for a long-term, leading role in global market infrastructure.
LSE will acquire up to a further 55% in LCH.Clearnet, a provider of clearing and risk management services, in addition to its existing 2.3% holding. LCH shareholders who accept the offer will receive €15 per share, comprising a cash consideration of €14 and a deferred consideration of €1.0.
As such, the maximum total investment made by LSE will be €536m (£461m). Of this, a maximum initial consideration of €328m (£282m) will be paid at completion of the offer, with up to a further €23m (£20m) to be paid as a deferred consideration in 2017.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The transaction will be immediately earnings enhancing for LSE.
Once the offer has been completed, LCH.Clearnet will undertake a €320m (£275m) capital raise to meet increased regulatory capital requirements, in which LSEG will participate pro rata to its post-Completion shareholding in LCH.Clearnet.
LSE's participation in this will be up to €185m (£159m).
The revised offer is conditional on LSE receiving enough acceptances to mean that it owns 50% (plus one share) of LCH.Clearnet.
Chris Gibson-Smith, the Chairman of LSE, said: "This is a compelling transaction and we are delighted to be partnering with LCH.Clearnet as global leaders in market infrastructure. Experience, stability and trust are cornerstones of our industry and together, we have secured the enlarged group's long-term role in the operation of international capital markets."
The company's Chief Executive Officer, Xavier Rolet, added: "Our partnership with LCH.Clearnet will be transformative. Together with our customers, we will promote greater innovation, choice and competition in the risk management industry, especially in listed derivatives. This new-style open-access clearing model, will build upon the successes we have already had with our existing equity and fixed income trading partnerships, Turquoise and MTS."
LSE's share price rose 0.5% to 1,403p by 09:15.
NR
-
The top stocks in the FTSE 100After a year of strong returns for the UK’s flagship index, which FTSE 100 stocks have posted the best performance in 2024?
-
A junior ISA could turn your child’s pocket money into thousands of poundsPersuading your child to put their pocket money in a junior ISA might be difficult, but the pennies could quickly grow into pounds – and teach them a valuable lesson about money
