Deutsche Boerse may lower LSE tender threshold

By Korea Herald
  • Published : Jul 11, 2016 - 10:35
  • Updated : Jul 11, 2016 - 10:35
Deutsche Boerse said it may reduce the threshold for shareholder approval of its London Stock Exchange Group’s acquisition to accommodate index funds.

A decision will be reached Monday after parties involved in the deal examine a technical issue, the company said Sunday a statement. Index funds can tender stock only after untendered shares are replaced -- a process that doesn’t take place until days after the minimum threshold is met. But the threshold may not be met until the final day of the offer period because many institutional investors wait until then.

The Frankfurt-based exchange operator may reduce the needed approval to about 60 percent of investors from 75 percent, a person familiar with the discussions said earlier Sunday, asking not to be named because the talks are confidential. Deutsche Boerse investors have until July 12 to tender their shares, while LSE shareholders approved the merger last week in a near- unanimous vote.

Deutsche Boerse management has argued that the U.K. decision last month to leave the European Union makes the deal even more important. However, in addition to worries that enough Deutsche Boerse shareholders may not approve the transaction, Brexit also has raised questions about whether London will retain its role in euro-denominated clearing and has whipsawed valuations in the companies.

A representative for Deutsche Boerse declined to comment earlier Sunday on the potential new tender threshold. The Wall Street Journal previously reported the level under consideration. (Bloomberg)