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LSE Share Chat - 23 Feb '16
#1
Fuzzyfish
Investment Newbie
Join Date:20 Jun '13
Posts:74

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT ANY SUCH OFFER WILL BE MADE

FOR IMMEDIATE RELEASE

23 February 2016

Potential merger of equals between London Stock Exchange Group plc ("LSE") and Deutsche Boerse AG ("Deutsche Boerse")

Further to the recent movement in LSE's share price, the Board of LSE and the Management Board of Deutsche Boerse confirm that they are in detailed discussions about a potential merger of equals of the two businesses (the "Potential Merger" to form the "Combined Group").

The Potential Merger would be structured as an all-share merger of equals under a new holding company. Under the terms of the Potential Merger, LSE shareholders would be entitled to receive 0.4421 new shares in exchange for each LSE share and Deutsche Boerse shareholders would be entitled to receive one new share in exchange for each Deutsche Boerse share. Based on this exchange ratio, the parties anticipate that Deutsche Boerse shareholders would hold 54.4 per cent, and LSE shareholders would hold 45.6 per cent of the enlarged issued and to be issued share capital of the Combined Group. The Combined Group would have a unitary board composed of equal numbers of LSE and Deutsche Boerse directors.

The Boards believe that the Potential Merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group. The combination of LSE and Deutsche Boerse's complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis. LSE and Deutsche Boerse believe that the Potential Merger would offer the prospect of enhanced growth, significant customer benefits including cross-margining between listed and OTC derivatives clearing (subject to regulatory approvals), as well as substantial revenue and cost synergies and increased shareholder value. All key businesses of LSE and Deutsche Boerse would continue to operate under their current brand names. The existing regulatory framework of all regulated entities within the Combined Group would remain unchanged, subject to customary and final regulatory approvals.

Discussions between the parties remain ongoing regarding the other terms and conditions of the Potential Merger.

The formal announcement of the Potential Merger remains conditional on, inter alia, agreement on the other terms and conditions of the Potential Merger, satisfactory completion of customary due diligence and final approval by the Boards. The parties reserve the right to a) waive these pre-conditions, b), with the agreement of the other party, to vary the form of consideration and/or make an offer on higher or lower terms (including the exchange ratio), albeit no revision is currently expected, and/or c) to adjust the terms to take account of any dividend announced, declared, made or paid by either party, save for ordinary course dividends (consistent with past practice in timing and amount) declared or paid prior to completion.

There can be no certainty that any transaction will occur. Any transaction would be subject to regulatory approval, LSE shareholder approval and Deutsche Boerse shareholders' acceptance, as well as other customary conditions.

LSE and Deutsche Boerse expect to provide a further update in due course.

In accordance with Rule 2.6(a) of the Code, Deutsche Boerse is required, by no later than 5.00 p.m. on 22 March 2016, to do one of the following: (i) announce a firm intention to make an offer for LSE in accordance with Rule 2.7 of the Code; or (ii) announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

The Potential Merger, if completed, would be cl***ified as a reverse takeover under the Listing Rules of the Financial Conduct Authority. LSE is required to provide certain confirmations to ensure that there is sufficient information available to the public with regard to the potential reverse takeover in order to avoid a suspension of LSE's shares. Pursuant to LR 5.6.10G(2) of the Listing Rules, LSE confirms that Deutsche Boerse has its shares listed on the Frankfurt Stock Exchange, which is a regulated market in the European Economic Area, and that Deutsche Boerse has complied with the disclosure requirements applicable on that market. Information disclosed p