LSE Highlights Merger Appeal With Robust Results -- Update
04 March 2016 - 9:50PM
Dow Jones News
By Rory Gallivan
LONDON-- London Stock Exchange Group PLC Friday reported a 85%
rise in full-year net profit and raised its dividend, highlighting
its merger appeal amid a potential bidding battle for the
group.
LSE is in talks about a potential merger with Deutsche Boerse
AG, the owner of the Frankfurt bourse, in a combination which would
create Europe's biggest securities-markets operator.
But on Tuesday U.S. rival Intercontinental Exchange Inc. (ICE)
said it is considering making an offer for LSE. Chicago's CME Group
Inc. might also be in the running, according to a person familiar
with the matter. Hong Kong Exchanges & Clearing Ltd. has said
it is closely watching the discussions between LSE and Deutsche
Boerse.
The LSE said net profit rose to 336.1 million pounds ($474
million) in the year ended Dec. 31 from GBP182.1 million the
previous year on a 49% jump in revenue to GBP1.32 billion.
The proposed final dividend of 25.2 pence a share takes the
full-year dividend to 36 pence, up 20% from the previous full-year
payout.
The group said it benefited from growth across its main
businesses and good cost control. Chief Executive Xavier Rolet
highlighted the LSE's global stock indexes business and
over-the-counter derivatives clearing by its LCH. Clearnet
unit.
"Across all of our businesses, we are well positioned with a
number of growth opportunities," Mr. Rolet said.
Any deal involving the LSE faces likely intense regulatory
scrutiny because of the overlap of its operations with its
suitors', making some business lines possibly too large for the
liking of antitrust authorities or, in the case of their clearing
houses, leading to one party amassing too much power or housing too
much risk.
Deutsche Börse and ICE own derivatives clearinghouses. But
Deutsche Börse focuses on listed products, while the LSE's focus is
on over-the-counter swaps. ICE's European clearing operation, ICE
Clear Europe, is dominant in credit, energy and commodity
derivatives, which also includes financial futures, after its
purchase of London's Liffe exchange.
CME, which in the U.S. accounts for around 40% of swaps clearing
with the remainder processed by LCH, has also made a push into
Europe.
Write to Rory Gallivan at rory.gallivan@wsj.com
(END) Dow Jones Newswires
March 04, 2016 05:35 ET (10:35 GMT)
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