Two companies linked with bids for the London Stock Exchange were yesterday on the verge of a merger to create the world's first transatlantic bourse.
It was claimed that the New York Stock Exchange and pan-European operator Euronext are to join forces and create the biggest trading platform in the world with a market value of £11 billion.
Both NYSE and Euronext have been in earlier talks over an LSE deal but decided the best option is to press on with their own merger. A deal could leave rival US operator Nasdaq with an unchallenged run at LSE. Last week Nasdaq increased its holding in LSE to 25.1 per cent.
Speculation over consolidation in the sector has reached fever pitch in recent weeks, with Germany's Deutsche Borse also proposing a merger with Euronext.
Much of the speculation has focused on LSE after Deutsche Borse launched a failed £1.35 billion approach in 2004.
Since then the value of offers for LSE has soared and its shares have risen from around 340p 18 months ago to a high of 1275p this month. Shares closed at 1245p on Friday, valuing LSE at £2.7 billion. A deal between NYSE and Euronext would see the combined company trading in New York and Paris.
It is suggested the proposal will be put to the Euronext board today ahead of the group's annual meeting in Amsterdam tomorrow.
But the Euronext board could face a backlash from some of its biggest shareholders who want the company to merge with Deutsche Borse.
In a further twist last week, Borsa Italiana joined the fray and said Euronext was its first choice for a future international alliance. ..SUPL: