As reported by Bloomberg:
London Stock Exchange Group Plc (LSE) cut its bid for a majority stake in LCH.Clearnet Group Ltd. by 30 percent after European regulators forced the clearinghouse to boost capital, three people with knowledge of the matter said.
Under the revised terms LSE presented to LCH.Clearnet, shareholders would get 13 euros a share in cash and a 1 euro special dividend, according to the people, who asked not to be identified as the discussions are private. Europe’s oldest independent bourse had originally offered 19 euros in cash plus the 1 euro dividend for as much as 60 percent of LCH.Clearnet, valuing the clearinghouse at 813 million euros ($1.08 billion).
The European Securities and Markets Authority has proposed that 95 percent of a clearinghouse’s cash deposits placed with financial institutions must be collateralized with debt instruments meeting certain conditions of liquidity and credit risk, LSE said in September. If adopted, the rules would force London-based LCH.Clearnet to increase capital by 300 million euros to 375 million euros.
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