Borsa Istanbul to sell its stake in London Clearing House (LCH) to LSE
The London Stock Exchange Group announced that it is in the process of increasing its majority shareholding in the UKbased clearing house LCH Group by buying shares from other investors, including Borsa Istanbul.
Borsa Istanbul acquired a 2 percent stake in London-based clearing house LCH. Clearnet from the London Metal Exchange in March 2015. Last month, Borsa Istanbul bought back 7 percent of its stake previously sold to Nasdaq.
The US based exchange Nasdaq acquired 5 percent in the Turkish stock exchange in 2013 and subsequently raised its stake to 7 percent. LSE has entered into agreements with certain minority shareholders of LCH to acquire up to a further 15.1 percent of LCH’s share capital, which is expected to take its majority ownership to over 80 percent, a statement from the group said.
LSE will be paying up to a maximum of EUR 438m (GBP 384m) to other shareholders. Borsa Istanbul, CFT & Viel & Cie, Commerzbank, Deutsche Bank, Nasdaq, and Nomura will be selling all their stakes in the LCH. Bank of America Merrill Lynch, Barclays, JP Morgan, Morgan Stanley and Societe Generale, will also be selling their shares but will retain a minority share in the clearing house.
The acquisitions will be funded from cash and existing debt facilities at closing and will be accretive to earnings following completion. The deal is expected to close before the end of 2018. LCH’s profit after tax was EUR 158m in 2017 and it has gross assets (net of balances with clearing members) of EUR 1,625m according to a company statement.