LCH.Clearnet has responded to last week's EUR830 million offer from a consortium of banks and Icap by indicating its willingness to interweave elements of the bid with its own restructuring plans. Meanwhile, the clearing house is also set to restructure its technology platform in a bid to save millions of euros a year.
LCH.Clearnet has confirmed that it received a bid from the consortium last week, which is thought to be at EUR11 a share, made up of EUR3 in cash, a EUR5 dividend and a further possible EUR3 payable after 30 months.
But the clearer has been working on its own plan to buy out its 123 shareholders and convert into a user-owned utility. After the conversion, LCH.Clearnet would invite shareholders to buy back in, making use of the clearer conditional on being a shareholder.
It is understood to consider the consortium's offer "underwhelming" but has now indicated its willingness to explore combining elements of the deal with its own plans, possibly offering the bidders - whose members hold around 20% of its shares - control of the board.
It is also looking to appease the bidders by making further fee cuts and restructuring its technology platform in a bid to save around EUR28 million a year. The clearer has yet to make any significant progress in merging its distinct London and Paris technology platforms, a factor which has hampered its efforts to match the costs of a new wave of cheaper competitive providers.
Chris Tupker, chairman, LCH.Clearnet, says: "We think the two proposals have a great deal in common and we hope we can find some way to synthesise the two."
The consortium's hand was strengthened last month when the US Depository Trust and Clearing Corporation called off its pursuit of the London outfit. The two signed a heads of agreement in October last year but failed to reach a deal.
The consortium members include Icap, Barclays, Citi, Deutsche Bank, HSBC Holdings, JPMorgan Chase, Nomura Holdings, Morgan Stanley, Royal Bank of Scotland, Societe Generale and UBS.