LSE puts merger with Deutsche on hold
London: In light of the great heat generated by the hostile take over offer from Swedish group, OM Group, the London Stock Exchange has put its controversial merger proposal with Deutsche Borse on hold. The hostile bid was mounted after the LSE board rejected a friendly offer from OM for a takeover.

It is understood that a vote on the merger with the German bourse, which was scheduled for next week, has been put on hold after an attack on LSE management by a group of leading stockbroking firms with shares in the exchange. The LSE board is expected to discuss the OM bid on Wednesday, aware its plan to merge with Deutsche Borse to create iX has failed to win shareholder support.

It is understood that, of the present two options, the LSE board prefers the merger with Frankfurt. But a revised proposal, changing the current "merger of equals" - terms criticised in both London and Frankfurt - is one option open to the stock exchange in its defence against the OM bid.

LSE shares, which are dealt on a special market run by Cazenove & Co, the stockbroker, closed last night at 29.60, just below their highest closing level. The price has jumped sharply since the bid.

Retail brokers are due to discuss the OM bid on Wednesday and are expected to ask for a meeting with OM executives to hear details of how a merged OM/ LSE would operate.
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