Shareholders of Liffe, the London-based futures and options exchange, have voted in favour of a proposal to work with Cap Gemini Ernst & Young, Battery Ventures and The Blackstone Group to exploit technology opportunities associated with Liffe Connect, the exchange's electronic trading system.
At an EGM yesterday, shareholders overwhelmingly approved a placing and open offer of 10 million new ordinary shares at £6 per share which will raise £57 million, net of expenses. Liffe's shareholders applied for 2.3 million (68%) of the 3.3 million new ordinary shares available in the open offer.
Boston-based Battery Ventures and the New York and London-based private equity firm The Blackstone Group will subscribe for approximately 7.7 million new ordinary shares, representing 29.4% of the enlarged issued ordinary share capital.
Liffe's Chairman, Brian Williamson, welcomed the outcome. He says: "We are now able to forge ahead with our plans to develop further our existing exchange business and fully realise the potential of our technology assets. "
Chinh Chu, senior managing director of The Blackstone Group comments: "We believe that Liffe is well positioned to capitalise on the core attractive business fundamentals and the growing trend of converting conventional exchanges to electronic trading platforms."
The Connect product currently trades an average daily nominal value of £300 billion. It is already available in 22 countries, providing access to more than 14,500 traders across all time zones. All of Liffe's financial futures and options contracts, formerly traded by open outcry, have migrated to the new technology platform in the last 24 months. Liffe's commodity contracts will make the switch on 27 November 2000.
In a report in yesterday's FT, Hugh Freedberg, Liffe chief executive confirmed that the Connect product has recently suffered a number of outages attributed to rising volumes. He is quoted as saying: "We have had some glitches recently and realise that, although it works 98.5 per cent of the time, traders want Connect to work 100 per cent of the time."