Has watchdog sunk the German bid to seize our stock exchange?

A German bid to buy the London Stock exchange was in tatters last night after EU competition watchdogs intervened.

The european Commission stepped in over fears the deal could create a monopoly. It ordered the LSE to sell an Italian trading platform. But bosses refused, saying it would be impossible to push the sale through.

Their decision throws the £21billion takeover into crisis and means it will collapse unless the Commission backs down.

one insider said last night: ‘It’s very bad. This was a total surprise – it had never been brought up before. The Commission has been digging its heels in and the ball is now firmly in their court.’

The Frankfurt-based German exchange Deutsche Boerse is bidding to buy the LSE in a deal that critics have warned would be against Britain’s national interest. It fol- lows months of painstaking talks with the Commission, after which LSE pledged to sell French business LCH SA to Continental exchange euronext for £433million.

This had raised hopes that there would be no further obstacles. But a fortnight ago, the Commission came back with an unexpected further demand that the LSE also sell Italian bond-trading platform MTS.

After a crunch board meeting on Sunday night, the exchange concluded this would be impossible without a long approval process run by watchdogs across europe.

The regulator could still wave the takeover through, despite the LSE’s refusal to cooperate, but this is unlikely. If the takeover fails it will bring the curtain down on more than a year of tough negotiations. Critics have warned the proposal could damage Britain, particularly as Brexit negotiations loom. German chief executive Carsten Kengeter would be head of the merged business, with Deutsche Boerse shareholders given a controlling stake.

The one concession to Britain – a promise that the corporate headquarters would be based in London – came under ferocious attack from politicians in Frankfurt.

Although UK ministers have stayed silent, there has been a groundswell of resistance to the takeover in the past few weeks.

Tory MP Sir Bill Cash, one of the takeover’s most outspoken opponents, welcomed its apparent collapse. ‘There are powerful reasons why it’s a slam-dunk that this isn’t in the national interest,’ he said.