LCH likely to stand alone: NYSE CEO

The head of NYSE Euronext, which made a bid for LCH.Clearnet, said on Friday he thinks the European clearinghouse is likely to remain independent. Chief Executive Officer Duncan Niederauer added in an interview that the bid, made jointly with bank-owned data provider Markit, does not change the dynamics of NYSE Euronext's planned $10.2 billion merger with Deutsche Boerse AG.
"I think LCH is likely to stand alone," Niederauer said on the sidelines of a conference hosted by Sandler O'Neill. "But I thought it was an opportunity to work with the banks." LCH.Clearnet's "options are to stand alone or recapitalise, and my guess is they'll try to stand alone," he said.
The New York Stock Exchange parent recently partnered with Markit, which is owned by banks and others, to bid for London-based LCH.Clearnet. LCH has said other exchanges also have made offers, and it has not made any decision public, if one has yet been made. LCH has declined takeover offers in the past few years.
Niederauer noted that NYSE Euronext, which now has a 9 percent stake in LCH, would be a minority stakeholder if the joint bid with Markit were to succeed - downplaying the possibility that the move could influence a European regulatory decision over whether to allow the Deutsche Boerse deal. "I don't really think it changes the competitive analysis at all because we're already a minority holder," he said.
"Nothing says you couldn't invite other venues in too, and make it look more like a true collaboration. I don't think it changes the calculus that much." Frankfurt's Deutsche Boerse struck the deal for the Big Board parent back in February, a plan that would create the world's largest exchange operator, trading virtually every asset class and operating in the United States and across Europe.
The yet-nameless combined company would have a near-lock on European exchange-based derivatives trading, so the deal faces a tough antitrust review in Brussels. Nonetheless, NYSE shareholders are set to vote on the merger on July 7, while those of Deutsche Boerse have until July 13 to tender their shares to the deal.