ICE said to line up financing for LSE bidding war

Intercontinental Stock Exchange is reportedly lining up financing for a bid for the London Stock Exchange to rival Deutsche Boerse’s offer.

Bloomberg cited people familiar with the matter as saying ICE, which owns the New York Stock Exchange, is in talks with banks to fund a formal offer in the coming weeks.

It is understood the talks are at an early stage, no final decision has been made on the timing or size of the bid and ICE could still decide against an offer.

The options being considered include shifting ICE’s legal address to the UK to take advantage of lower tax rates.

Because of the cost savings associated with such a move - known as tax inversion - ICE would then be able to make a higher offer.

Bloomberg said although ICE was discussing the feasibility of such a move, it is not planning an inversion and may decide against it.

LSE and Deutsche Boerse confirmed in February that they were in discussions about a potential merger.

Under the terms of the potential deal, LSE shareholders would receive 0.4421 new shares in exchange for each LSE share and Deutsche Boerse holders would get one new share in exchange for each DB share.

This would mean Deutsche Boerse shareholders would hold 54.4% while LSE shareholders would have a 45.6% stake in the combined group.

At 1230 GMT, LSE shares were up 0.5% to 2,846p.