LSE Confirms In Exclusive Talks To Buy Turquoise Trading
October 01 2009 - 10:39AM
Dow Jones News
The London Stock Exchange PLC (LSE.LN) on Thursday confirmed
that it is in exclusive talks to buy alternative trading system
Turquoise Trading Ltd.
The talks "may lead to a transaction," the exchange said in a
statement, adding that a further announcement will be made in "due
course."
Earlier Thursday, Financial News reported that Turquoise entered
into exclusive talks with the exchange following weeks of a
strategic review. Financial News is published by News Corp. (NWS),
the owner of this newswire.
Turquoise, which is owned by nine U.S. and European investment
banks, and began trading in September 2008, is one of several
"alternative" trading platforms facing trading volume pressure
because of the financial crisis.
Nonetheless, their existence has challenged traditional players,
such as the LSE, with faster and cheaper services.
According to Arden Partners analyst Sarah Spikes, however, the
LSE wouldn't have much to gain by purchasing Turquoise.
The exchange is already addressing the need to speed up its
trading platform with MillenniumIT, a Sri Lankan software company
it acquired last month for $30 million.
"If Turquoise is prepared to sell at a very low value, it might
make sense to the LSE, but there's nothing they would get from
Turquoise that they don't already have," Spikes added.
In addition, Turquoise's market share - around 3% share in
European equity share trading - isn't significant enough to help
the exchange, the analyst said.
UBS AG (UBS) was reportedly hired to help Turquoise in the
strategic review, and it sent sales prospectuses to 18 possible
buyers, including Germany's Deutsche Boerse AG (DB1.XE), the NYSE
Euronext (NYX), Nasdaq OMX (NDAQ) and the LSE.
The banks behind Turquoise are Morgan Stanley (MS), Goldman
Sachs Group Inc. (GS), BNP Paribas SA (BNP.FR), Societe Generale SA
(GLE.FR), Citigroup Inc. (C), Deutsche Bank AG (DB), Credit Suisse
Group (CS), UBS AG and Merrill Lynch, now part of Bank of America
Corp. (BAC).
-By Patricia Kowsmann, Dow Jones Newswires. Tel
+44(0)207-842-9295, patricia.kowsmann@dowjones.com