The London Stock Exchange (LSE) today rejected a _2 billion conditional takeover offer by Deutsche Boerse, operator of the Frankfurt stock exchange, but left the door open for a higher bid.
The LSE, Europe's largest share market, said Deutsche Boerse's proposed cash offer does not recognise the 'inherent value in the London Stock Exchange's business'.
However the LSE added that the exchange 'is willing to continue to hold discussions with Deutsche Boerse and Euronext about the possibility of a significantly improved offer'.
Deutsche Boerse replied to the rejection by saying it might be prepared to improve its offer of at least 530p per share, or just under €2 billion in all. The price was the same as the informal bid made by the German stock market operator in December.
LSE is also coveted by Euronext, which operates the Paris, Amsterdam, Brussels and Lisbon stock exchanges. Industry observers were waiting to see how both the LSE and Euronext would respond to the German bid.
Deutsche Boerse said it was prepared to make numerous concessions to the LSE in order to persuade the London market's management of the virtues of a merger.
But it also sought to calm the concerns of its own shareholders and the German authorities by promising that Deutsche Boerse will continue to be incorporated in Germany with its global headquarters in Frankfurt.
