London Stock Exchange shares have taken another leg up to make fresh all-time highs based on potential competing bids for its operations. Intercontinental Exchange (ICE: owner of 23 exchanges across the US, Canada and Europe, incl. NYSE and London’s LIFFE futures) could be mulling swooping in with a more interesting and rival bid to the recent one received from German outfit Deutsche Boerse (DB), as could US peer CME Group. Those buying into LSE are hoping that a bigger US appetite for LSE’s operations will be rewarded with an even higher offer than the £20bn merger of equals with DB that is currently on the table and which would result in the biggest exchange in Europe; a genuine rival to US markets.

LSE and DB had disclosed that they had timed their announcement to make use of what was becoming a cloud of political uncertainty surrounding the UK’s referendum on EU membership, however, US rivals thinking about a bidding war could imply this hurdle not being quite the worry first thought. A transatlantic transaction involving such a chunk of the global equities market would be sure to face significant regulatory hurdles of its own, especially for ICE given its existing London presence. Then again, while the industry has shown cyclical and almost seasonal interest in continued consolidation over the years, could US efforts merely be an attempt to thwart DB’s efforts and keep things just as they are. Much to regulators glee.

Mike van Dulken, Head of Research, 1 March