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LSE buys further stake in clearing arm LCH

Published 13/09/2017, 18:44
© Reuters. FILE PHOTO - People walk through the lobby of the London Stock Exchange in London
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(Reuters) - London Stock Exchange Group LSEG.L> (LSE) has agreed to buy an additional stake of up to 6.8 percent in its clearing arm LCH from some of its minority shareholders, the company said in a statement on Wednesday.

LSE did not disclose the terms of the deals, in a brief statement issued after markets closed.

In 2013 LSE acquired a majority stake in LCH Clearnet by paying 15 euros per share. After the deal, LSE was expected to own up to 57.8 percent of the firm, leaving other LCH shareholders with at most 42.2 percent.

LSE has committed to invest to drive growth after the collapse of its proposed merger with Deutsche Boerse (DE:DB1Gn) and in August reported a higher first-half profit, partly helped by a strong performance in its clearing business.

LCH currently dominates clearing of euro-denominated financial instruments but the future location of euro clearing is uncertain following Britain's move to leave the European Union.

The European Commission has proposed that the EU would help supervise clearing houses like LCH in London after Brexit, with forced relocation of clearing to a euro zone rival such as Eurex only a last resort.

© Reuters. FILE PHOTO - People walk through the lobby of the London Stock Exchange in London

LSE said on Wednesday that all shareholders in LCH had been notified of the share sale and that it would in due course confirm its updated shareholding in LCH following the deals.

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