L.S.E. Listing

2 minute read

When Sweden’s OM Group jolted London’s bluebloods with a takeover run at the London Stock Exchange last year, the old boys simply denied it permission to buy. As of July, it won’t need to ask. That’s because last week the L.S.E. announced it was going to list shares of itself on its own trading platform, the second major European exchange to do so. Deutsche Börse floated shares in February, raking in nearly $1 billion in the process, and the French-Dutch-Belgian exchange Euronext hopes to do the same.

Such moves can have obvious payoffs. Deutsche Börse has built an information portal, a new electricity exchange, a seed operation for B2B exchanges and will soon have a new clearing apparatus, while Euronext will use some of its cash infusion to upgrade its trading and clearing technology.

Unlike the Euronext and Deutsche Börse flotations, the L.S.E. move doesn’t involve issuing new shares.

It simply means existing shares will be traded on the exchange, with no limits on who can buy them. Some shareholders, including UBS Warburg, are near the current 4.9% cap and have said they’d like to go higher.

That, and public buying, could drive the share price higher, increasing the exchange’s market capitalization and making it easier to form strategic alliances.

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