In its bid to win over the London Stock Exchange (LSE), German stock market operator Deutsche Börse appeared to be pulling out all the stops on Wednesday to convince its London rival of the virtues of a merger.
Bullish about London: The Frankfurt Stock Exchange
Deutsche Börse, which runs the Frankfurt stock exchange, has offered LSE chief Clara Furse a top job in the merged company, Britain's Financial Times reported Wednesday, quoting advisers close to the talks.
While the headquarters of the new merged company would remain in Frankfurt, the key cash equities businesses would be managed out of London and headed by LSE's Furse, sources said. "If it came to a takeover, such a solution is to be anticipated," one source said.
Euronext the rival suitor
London Stock Exchange
Deutsche Börse last week put just under €2 billion ($2.6 billion) on the table to buy the LSE. The London market immediately rejected the bid but said it was prepared to negotiate a higher price.
Deutsche Börse's arch-rival Euronext, which comprises the Paris, Amsterdam, Brussels and Lisbon stock markets, also entered the fray this week, saying it was prepared to make a counter-bid.
Both suitors flew to London on Tuesday to try and woo the LSE and Furse. LSE and its advisers, Merrill Lynch, met Deutsche Börse chief Werner Seifert and his advisers, Goldman Sachs, on Tuesday.
Parallel talks were also held by Furse and Euronext chief Jean-Francois Theodore.
German charm offensive
Werner Seifert, chairman of the board of the Frankfurt stock exchange
Meanwhile Deutsche Börse's Seifert is piling on the charm to overcome British reticence to a tie-up, pledging in an interview with the British Daily Mail on Wednesday that there would be no massive job cuts and LSE customers would be given a bigger say in strategy.
In a further move, Deutsche Börse announced Wednesday that it planned to adopt English as its official language from next year. However, the company sought to play down the move as a ploy to win over LSE.
"Our staff is made up of people from more than 30 different countries and English is already used as a language of common practice," a spokeswoman said. It has been decided that English will be Deutsche Börse's corporate language from the start of January."
Indeed, only 20 percent of transactions on Deutsche Börse's derivatives market Eurex are carried out by Germans, while 80 percent are carried out by foreigners, largely in London.
A stock trader on the phone at the Frankfurt stock market
The majority of Deutsche Börse's employees are not German and there has even been talk of changing the name -- Deutsche Börse means literally German Stock Exchange -- to give it a more European feel, much in the same vein as that of its rival Euronext.
Pertinently, Deutsche Börse plans to hold its New Year reception in 2005 simultaneously in Frankfurt and in London in the Tate Modern museum.