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Paris-based Euronext announced plans to use ICE’s Dutch business for 10 years from mid-2018, laying out an alternative to the long-running clearing arrangement it has with the LSE’s LCH clearing house. Euronext accounts for about half of the LCH France business. It hoped to force the LSE, which owns 58 per cent of LCH, to rethink its termination last week of a plan to sell Euronext the whole unit for €510m. A clearing house stands between two parties in a deal, managing the risk to the market if one side defaults. However, its gambit was quickly rebuffed by the LSE, which signalled its intention to keep the asset. The LSE had offered the sale of the unit as a concession to European antitrust regulators to bless its merger with Deutsche Börse.
“The strategic priority for Euronext for a long time was to buy back Clearnet,” said Stéphane Boujnah, chief executive of Euronext. “We tried to find something for 18 months. We wrote to the board of the LSE and LCH to complete the transaction irrespective of the outcome of the merger . . . they informed us they had no interest. We remain a willing buyer but there is not a willing seller.” In a statement, the LSE said the deal was “specifically contingent” on the Deutsche Börse merger completing. It described Euronext’s overall contribution to the unit as “immaterial” and less than 1 per cent of its adjusted operating profit. To underline its commitment, the LSE plans to expand the range of equities, bond and repo clearing services from its Paris operations.
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