Euronext hires big guns in battle for LSE

Euronext hires big guns in battle for LSE

Euronext positioned itself as a potential counter-bidder for the London Stock Exchange yesterday after the Franco-Belgian exchange's chief executive arrived in the Square Mile and immediately appointed two new heavyweight financial advisers.

Jean-François Theodore, the chief of Euronext, hired Morgan Stanley and ABN Amro to work alongside Swiss bank UBS, immediately sparking speculation that the Paris-based exchange would try to spoil the attempts by arch-rival Deutsche Börse to takeover the LSE.

The timing of Mr Theodore's presence in London was particularly ominous for the Deutsche Börse, whose chief executive Werner Seifert was also in London's financial centre yesterday for face to face talks with the LSE and its chief executive, Clara Furse.

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Raising the prospect of a two-way bidding war for the LSE, Mr Theodore has already proved his ability to take over exchanges. He snatched Liffe, the London-based derivative market, out of the grasp of the LSE after a bitter bid battle three years ago. He was expected to attend the Liffe Christmas party last night where he faced City revellers keen to find out the timing of any counter-bid for the LSE.

Meanwhile, Mr Seifert's meeting with Clara Furse, the LSE chief executive, followed an invitation by the London exchange to hold further talks after his initial £1.3bn, or 530p a share bid, was rejected on Sunday.

The LSE appears to be try ing to spark an auction and at very least try to wrench a higher price out of the Deutsche Börse, which is thought to have the firepower to increase its offer.

After another heavy day of trading LSE shares closed 7p higher at 551p - a record high and 21p above the level of what is considered to be the Deutsche Börse's opening shot.

Many in the City believe the LSE would prefer to strike a deal with Euronext, although doubts have been raised about its ability to trump the £1.3bn bid from its German rival. Euronext believes it has a better record of integrating acquisitions, given that it has successfully combined markets in France, the Netherlands and Belgium.

· Air China yesterday became the first Chinese company to float on the London Stock Exchange for four years.

The airline, which operates daily flights between Beijing and London and is China's biggest in the sector, raised $1.08bn (£558m) through its dual listing in London and Hong Kong.

Guardian Unlimited © Guardian Newspapers Limited 2004