LSE Highlights Merger Appeal With Robust Results
05 March 2016 - 12:10AM
Dow Jones News
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 Bö rse
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. 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 Bö
rse.
The LSE said net profit rose to £ 336.1 million ($474 million)
in the year ended Dec. 31 from £ 182.1 million the previous year on
a 49% jump in revenue to £ 1.32 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 Bö rse and ICE own derivatives clearinghouses. But
Deutsche Bö rse 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 07:55 ET (12:55 GMT)
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