LSE to take control of pan-European trading platform Turquoise
04 January 2010
The merger of the businesses of Turquoise and Baikal Global Limited will expand LSE Group services across Europe in both lit and dark trading, and liquidity aggregation, with the objective of driving European trading volume growth and promoting venue choice.
London Stock Exchange Group plc (LSEG) and Turquoise Trading Limited (Turquoise) announced their agreement to create a new pan-European trading venture through a merger of the businesses of Turquoise and Baikal Global Limited (Baikal).
The new venture, an FSA regulated Multilateral Trading Facility (MTF), will expand LSEG services across Europe in both lit and dark trading, and liquidity aggregation, with the express objective of driving European trading volume growth and promoting venue choice. It will benefit from synergies with LSEG infrastructure and the planned migration to Millennium IT trading technology.
Continuing to trade under the Turquoise name, the merged entity will be 60 per cent owned by LSEG and 40 per cent owned by the existing Turquoise shareholders, who are global investment banking clients of LSEG. LSEG intends to broaden equity participation in the new venture by selling up to a further nine per cent of the issued share capital to other interested parties. LSEG will retain a majority shareholding in the new venture.
Commenting on the agreement, Xavier Rolet, CEO of LSEG and Chairman-designate of the new venture, said: "The European marketplace for trading securities has scope to become more efficient and to grow significantly in the coming years. Turquoise’s existing pan-European footprint is a strong proposition and, together with the introduction of new trading technology and a neutral structure, we believe it is now well positioned to be an agent of change and to capture a healthy slice of the market's growth potential."
The transaction will be effected through the acquisition by a newly-incorporated subsidiary of LSEG of the existing Turquoise shareholders’ interest in Turquoise. In consideration for the transaction, the existing Turquoise shareholders will receive 40 per cent of the issued share capital in the new company which will also become the holding company of Baikal. The transaction is expected to be completed by mid-February 2010, subject to satisfaction of all conditions in the agreement (including the receipt of all necessary regulatory clearances).
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