CEO Clara Furse has previously said: “If it is possible to do a deal with another exchange that validates our model then we will do it. Clearly, what we have in London is a tremendous success story ... 46% of all international equity business takes place in London. It is by far the most efficient equity market in the world. There is very little question in people’s minds whether consolidation should take place anywhere but in London.”
A Deutsche Borse or Euronext acquisition does not seem to accord with the idea of consolidation taking place in London. A bigger, more efficient European equity market is highly desirable, but shouldn’t the top dog in terms of market depth be doing the buying and not the other way around?
It is not a narrow question of whether or not the LSE should be owned by a foreign institution – most of the City is dominated by foreign institutions. The issue is why “a tremendous success story” is on the defensive rather than on the march.
Unless Ms Furse can make the case that her role was to spruce up the LSE for sale at best price, unfortunately the conclusion must be that the LSE has been underperforming.
Investors who tried to get more information to make a judgment in mid-December would have had little joy from the LSE website because it was “temporarily unavailable due to essential maintenance”. Perhaps that was all they needed to know.
