CME Group: Wasn't Asked To Bid On LCH.Clearnet

CHICAGO (Dow Jones) -- CME Group Inc. (CME) did not submit a bid for London-based clearinghouse LCH.Clearnet last month because it wasn't invited into the process, according to CME's executive chairman.

CME's Terry Duffy on Wednesday declined to state whether CME would be interested in a deal for the clearing firm, which received offers from several other exchanges, but said CME was well-positioned to compete for trade-processing business either way.

"I'm confident we can compete," Duffy said, speaking to reporters following CME's annual shareholder meeting. "We have a very vibrant clearinghouse."

LCH.Clearnet handles trades in stocks, futures and options alongside a leading position in the off-exchange market for interest-rate swaps, an area CME is also targeting with a new U.S. service.

The user-owned firm late last month confirmed it received several proposals about possible merger deals. Nasdaq OMX Group (NDAQ) tabled a bid, as well as a partnership effort between NYSE Euronext (NYX) and trade data company Markit.

London Stock Exchange Group plc (LSE.LN) also was reported to be among the bidders, but has subsequently distanced itself from any talks.

CME last month launched its own London-based clearinghouse, CME Clearing Europe, which aims to process trades in a range of energy contracts that are traded off-exchange. CME aims to eventually expand the unit to handle other products in credit and interest-rate markets.

Duffy said Wednesday the new facility eventually would also handle trades in exchange-listed derivatives, though it is "too early to say" what form these may take.

CME last week made waves by announcing plans to trade in the U.S. a slate of contracts linked to euro-denominated interest rates, in a direct challenge to U.K. markets run by NYSE Euronext.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

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