Nyse Euronext gets EUR399m from LCH.Clearnet stock sale
30 July 2007 | 5226 views | 0
Stock exchange operator Nyse Euronext says it will receive EUR399 million from the sale of shares in UK clearing house LCH.Clearnet.
The London clearing house said in February that it had reached an agreement in principle to buy out pan-European exchange Euronext - its largest shareholder. In March Nyse Euronext said it planned to cut its holding in LCH.Clearnet from 41.5% to just five per cent.
LCH.Clearnet has now redeemed all outstanding convertible preference shares held by Nyse Euronext at a value of EUR199 million. The clearing house also repurchased 20 million ordinary shares held by Nyse Euronext for EUR10 per share, which equals the market value of the shares when issued in December 2003.
Under the terms of the agreement, LCH.Clearnet will also buy back an additional 6.2 million ordinary shares from Nyse Euronext for EUR61.8 million by April 2008.
Following the second repurchase, Nyse Euronext will retain a five per cent stake in LCH.Clearnet and will have the right to appoint one director to the board.
Details of the buy-out follow last week's news that US market operator IntercontinentalExchange (ICE) is terminating its existing clearing agreements with LCH.Clearnet and establishing its own clearing operation in Europe.
The US exchange has also appointed LCH.Clearnet's Paul Swann as president of its European clearing unit. Swann has been at London clearing house for 20 years,where he has held various positions including managing director, group risk and managing director, change.