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LSE Said to Join in Bidding for Swaps Clearinghouse LCH

September 01, 2011

(Adds LCH response in third paragraph.)

Sept. 2 (Bloomberg) -- London Stock Exchange Group Plc is bidding for a majority stake in LCH.Clearnet Group Ltd., the world’s biggest clearinghouse for swaps, according to a person familiar with the matter.

LSE joins Markit Group Ltd., which provides data on swap prices, in trying to purchase the London-based company. Interest in LCH intensified after Deutsche Boerse AG and NYSE Euronext agreed to merge in February, creating the world’s largest exchange operator by market value and winning a dominant share of futures trading in Europe. NYSE Euronext Chief Executive Officer Duncan Niederauer said June 1 that he was working with Markit on a bid for LCH.Clearnet.

Victoria Brough, a spokeswoman for London-based LSE, and Andrea Schlaepfer of LCH declined to comment on whether there was a bid.

LSE’s offer values LCH at 1 billion euros ($1.4 billion), the Financial Times reported, without saying where it got the information.

Clearinghouses such as LCH and Eurex Clearing operate as counterparties for every buy and sell order executed by their members, who post collateral, reducing the risk from a trader defaulting on a deal. Exchange operators from New York to Frankfurt and Singapore have sought takeovers to augment equity businesses after regulation and automated trading eroded profit.

--Editors: Nick Baker, Chris Nagi

To contact the reporters on this story: Nandini Sukumar in London at; Nikolaj Gammeltoft in New York at

To contact the editors responsible for this story: Andrew Rummer at; Nick Baker at

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