The London Stock Exchange has confirmed that it has made a majority bid for European independent clearing house LCH.Clearnet, opening up a bidding war with post-trade data group Markit.
The LSE is understood to have tabled a bid of EUR21 a share, which values the clearer at EUR1 billion. This is a significant uplift from Markit's valuation of EUR10 per share.
The LSE says talks are at an early stage, but it is desperate to clinch a deal that would give it the muscle to fight off the threat posed by the proposed merger of Deutsche Börse and Nyse Euronext. If approved by European competition authorities, the German and US exchanges would create a powerhouse in derivatives trading and post-trade clearing services.
Nyse Euronext, which is understood to be party to the Markit bid, in June agreed a one-year extension to its UK and European clearing deal with LCH.Clearnet, postponing plans to build and operate an inhouse clearing system by November 2012.
LCH.Clearnet has yet to comment on the LSE's declared interest.