LCH.Clearnet and London Stock Exchange seal the deal on lower offer
02 May 2013 London
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LCH.Clearnet and London Stock Exchange have announced that their joint revised offer is “wholly unconditional” and is now completed.
On 7 March, LCH.Clearnet and London Stock Exchange Group (LSEG) announced a change in the cash offer from London Stock Exchange—the wholly owned subsidiary of LSEG—for a majority stake in LCH.Clearnet.
LSEG re-negotiated its acquisition down to €15 per share from €20, with full terms and conditions of the revised offer sent to shareholders in both companies.
A spokesperson from LSEG commented that new regulations requiring clearinghouses to put more capital aside led LCH.Clearnet to require more capital, and therefore more funding from shareholders.
“LCH.Clearnet has now received sufficient irrevocable binding subscription commitments in order to cover the full amount of LCH.Clearnet's capital raise and so satisfy the capital raise condition,” said a statement from the firm.
It is expected that the capital raise will be completed in Q2 2013. In a circular, LCH.Clearnet said that clearing fee revenue for the first three months of 2013 has increased compared with the Q4 2012, particularly in key OTC business lines.
“These increases are in part offset by [our] profit share arrangements. In a challenging market environment, LCH.Clearnet continues to manage its risk profile. Realised net investment income is down year over year reflecting lower average collateral levels compared to 2012.”
“LCH.Clearnet continues to maintain a focus on cost discipline although operating expenses are up reflecting investments made in 2012 to grow the business and respond to regulatory change.”
“[We] remain confident of its strategic position in the market, given customer demand and regulatory changes are creating enhanced opportunities for clearing and risk management services globally."
On 7 March, LCH.Clearnet and London Stock Exchange Group (LSEG) announced a change in the cash offer from London Stock Exchange—the wholly owned subsidiary of LSEG—for a majority stake in LCH.Clearnet.
LSEG re-negotiated its acquisition down to €15 per share from €20, with full terms and conditions of the revised offer sent to shareholders in both companies.
A spokesperson from LSEG commented that new regulations requiring clearinghouses to put more capital aside led LCH.Clearnet to require more capital, and therefore more funding from shareholders.
“LCH.Clearnet has now received sufficient irrevocable binding subscription commitments in order to cover the full amount of LCH.Clearnet's capital raise and so satisfy the capital raise condition,” said a statement from the firm.
It is expected that the capital raise will be completed in Q2 2013. In a circular, LCH.Clearnet said that clearing fee revenue for the first three months of 2013 has increased compared with the Q4 2012, particularly in key OTC business lines.
“These increases are in part offset by [our] profit share arrangements. In a challenging market environment, LCH.Clearnet continues to manage its risk profile. Realised net investment income is down year over year reflecting lower average collateral levels compared to 2012.”
“LCH.Clearnet continues to maintain a focus on cost discipline although operating expenses are up reflecting investments made in 2012 to grow the business and respond to regulatory change.”
“[We] remain confident of its strategic position in the market, given customer demand and regulatory changes are creating enhanced opportunities for clearing and risk management services globally."
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