CEO: A compelling transaction we are delighted to partner with The London Stock Exchange Group on Thursday said it had agreed a revised takeover bid of LCH.Clearnet, wrapping up its long pursuit of the British clearing house, AFP has reported.
LSEG, which operates the London Stock Exchange and Italy's Borsa, said it would acquire up to a further 55.5 percent in LCH.Clearnet, adding to its current 2.3 percent interest.
LSEG would meanwhile offer €15 ($19.55) a share, down from an original offer of €20 that had been agreed a year ago.
The terms of the deal had been outlined by LSEG at the end of January and were determined after long negotiations between the pair that had been triggered by regulatory changes in Europe.
"Together, we see significant revenue opportunities opening up as a result of both customer and regulatory demand for more efficient and more sophisticated tools to manage market risk," LCH.Clearnet chief executive Ian Axe said of the agreement.
LSEG chairman Chris Gibson-Smith added: "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,” he said.
The lower price reflects the higher costs that LSEG would likely face as a result of new regulations increasing the financial buffer that clearing houses must set aside to cover risks of default.
Clearing houses play a key role in the transaction of shares between two parties, charging clients a fee to guarantee deals should one side default.