A counter-bid to DTCC’s offer for European clearing house LCH.Clearnet may still emerge, despite the lack of a firm proposal more than a month after ICAP, a UK-based inter-dealer broker, acknowledged its role in the consortium of brokers considering the counter-bid.
Sources within the consortium told theTRADEnews.com that it was not too late to scupper a EUR 739 million offer made by US post-trade processing firm Depository Trust & Clearing Corporation (DTCC) in October last year.
DTCC expects to sign a definitive agreement to acquire LCH by the end of March – a delay from the original date of 15 March – leaving only weeks for the consortium to show its hand. LCH.Clearnet has not given any deadlines for a counter-bid.
Following ICAP’s announcement of its involvement in a consortium in early February, a number of brokers have been identified as potential partners, including BNP Paribas, Citi, Deutsche Bank, HSBC, J.P. Morgan, Royal Bank of Scotland, Société Générale and UBS. The London Stock Exchange is also thought to be involved.
A spokesperson for LCH.Clearnet told theTRADEnews.com that discussions and due diligence with DTCC are continuing. DTCC spokesman Stuart Goldstein confirmed this, adding, “We are still looking at the end of March. It is still on track. We are still optimistic based on what we think we can offer, but we will have to see what transpires over the next several weeks.”
Under its proposals, DTCC intends to convert LCH.Clearnet from a for-profit to a user-owned and governed at-cost model within three years of acquiring the firm. “We still think the value propositions that LCH and DTCC saw in the deal are compelling for the market as a whole,” Goldstein said.
European post-trade services firm Euroclear, LCH.Clearnet’s biggest shareholder with a 15.8% stake, supports the DTCC bid in principle, but is open to what both suitors have in mind. “We haven’t received enough details yet to put our flag in either corner,” said Euroclear spokesman Denis Peters.