March 28, 2024

DealBook: London Stock Exchange Revises Offer for Clearinghouse

LONDON — The London Stock Exchange Group said on Monday that it had revised the terms of its takeover proposal for LCH.Clearnet, citing the changing regulatory environment.

The London Stock Exchange provisionally agreed to pay 15 euros, or $20, a share for 60 percent of LCH.Clearnet, independent clearinghouse for financial transactions. In March, the London bourse offered 19 euros a share, plus 1 euro per share as a special dividend to be paid in five years.

The companies said the changes followed discussions over coming regulation that could for the LCH to raise more capital and crimp profits . European regulators have been proposing stricter rules for clearinghouses to safeguard their operations, forcing them to increase their reserves.

Like rivals, the London Stock Exchange has looked to deals in the face of increasing competition and weakness in its core equity business. With LCH, the London exchange may benefit from regulatory changes, capturing the increasing volume of over-the-counter derivatives that will move to clearinghouses. The stock exchange currently outsources clearing activities to LCH.

Such businesses have been especially attractive in the current conditions. Last week, the IntercontinentalExchange agreed to pay $8.2 billion for NYSE Euronext to create a trans-Atlantic trading giant with a major focus on derivatives.

Under the revised plan, the London Stock Exchange would pay 14 euros per LCH.Clearnet share on completion of the transaction and 1 euro per share in 2017, which would replace the special dividend, the two companies said. Both payments would be in cash. The firms also agreed on extending their takeover negotiations until Jan. 31 to finalize the details of the offer.

Article source: http://dealbook.nytimes.com/2012/12/24/london-stock-exchange-revises-offer-for-clearinghouse/?partner=rss&emc=rss

British Business Hesitant to Defend Staying in European Union

LONDON — The chairman of the London Stock Exchange, Chris Gibson-Smith, simply does not have the time to speak. Christopher North, the boss of Amazon in Britain, is too busy as well. And Charles Dunstone, the founder of the mobile phone retailer Carphone Warehouse, also has an exceptionally full agenda.

All three are among a dozen or so top business and financial leaders concerned enough about Britain’s future in the European Union to join the advisory council of a group campaigning to keep the country in the bloc.

But not many of them seem ready to explain why in public.

Bringing access to an economic area of about 500 million people, membership in the European Union is vital to many British businesses. Yet with the public divided over Britain’s ties to the bloc, most business leaders prefer a discreet silence to risking criticism.

Recently the stakes have increased, with Prime Minister David Cameron promising to loosen British ties to the bloc and possibly hold a referendum after negotiating a more arm’s-length relationship. After almost three years of crisis in the euro zone, there is more speculation than ever about a possible British withdrawal.

Britons have never been enthusiastic about the idea of European integration. So pro-Europeans are frustrated by the reluctance of business to stress the commercial benefits, particularly since, in private, company bosses can be outspoken about the risks of withdrawal.

“What they say to me when I meet them is this would be disastrous for British business,” said Glenis Willmott, leader of the British Labour Party’s members of the European Parliament.

Last month, Roger Carr, chairman of the main business lobbying organization, the Confederation of British Industry, appealed to his colleagues to break their silence or risk a possibility that now goes by the shorthand “Brixit”: British exit.

On Europe it was “essential that the voice of British business is loud and clear in extolling the virtues of future engagement,” he said.

A poll of business leaders by Ipsos MORI, commissioned in 2011 by Business for New Europe, a lobbying group campaigning for continued British membership, showed that 33 percent said they strongly agreed that a British exit from the European Union would damage business.

So why the silence when the stakes are so high?

“I ask myself, Why are these people not willing to be more outspoken?” said Phillip Souta, director of Business for New Europe. Its advisory council includes Mr. Gibson-Smith, Mr. North and Mr. Dunstone — all of whom declined to be interviewed.

“But I understand why they are not willing to be more outspoken is because it is so politically divisive,” he added. “Boards are divided on all of these issues. If you don’t have consensus they will agree not to talk.”

Some business leaders who supported earlier pro-European initiatives have been compromised by having advocated British membership in the now struggling euro.

Martin Sorrell, chief executive of the advertising group WPP and one of a handful of business figures happy to go on television to make a pro-European case, says many colleagues find the European Union too politically charged.

“Business leaders don’t want to speak out on these controversial issues,” he said. “They’ve got enough to do trying to run their own businesses and focusing on their own businesses and challenges.”

And even pro-European company bosses tend to have some reservations about the way the European Union is run, including the level of bureaucracy, the “more extreme” pieces of European legislation and the increases demanded by some in the bloc’s budget, he said.

Nevertheless, Mr. Sorrell says he believes that Europe’s internal market is “a major economic opportunity that we would live to regret passing up” and Britain has a better chance of resolving its problems with the union if it argues from within.

With the debate moving so swiftly in a euro-skeptic direction, pro-union campaigners are beginning to organize a counteroffensive.

If there is a referendum on Britain’s relations with the union, Mr. Sorrell says he believes that his business colleagues will stir.

Ms. Willmott thinks there’s no time like the present. “They say this to us privately, why not say it publicly?” she said. “It’s about time we heard these arguments.”

Article source: http://www.nytimes.com/2012/12/04/business/global/uk-backers-of-europe-want-business-to-speak-up.html?partner=rss&emc=rss

DealBook: Ex-BP Chief’s Investment Firm Files for I.P.O.

7:29 p.m. | Updated

Tony Hayward, a former BP chief executive, aims to raise £1 billion, roughly $1.6 billion, in an initial public offering of the energy investment company Vallares, which he co-founded.

Vallares plans to use the proceeds to make a large acquisition in the oil and natural gas industry, the company said in a statement filed on Thursday with the London Stock Exchange.

Mr. Hayward set up Vallares with the financier Nathaniel Rothschild and Julian Metherell, a senior Goldman Sachs banker, after resigning from BP last year in the aftermath of the disastrous oil spill in the Gulf of Mexico.

“We will have the cash, access to funds and the capability to unlock value where the current owners have neither the capital nor technical expertise to develop the assets,” Mr. Hayward said.

Vallares said it planned to sell shares at £10 apiece on the London exchange and to allocate shares on or around June 20. The company would be structured like Mr. Rothschild’s investment vehicle Vallar, which raised £707 million in an initial share sale last July to buy a coal business in Indonesia.

Vallares said it intended to buy a company or assets worth £3 billion to £8 billion, focusing on areas like Russia, the Middle East, Africa, Asia or Latin America.

The share sale is being managed by Credit Suisse, JP Morgan Cazenove and Evolution Securities.

Article source: http://feeds.nytimes.com/click.phdo?i=b3de3e669f41286a883b575c00b7a5b6