Markit Drops Out of Race for London Clearinghouse

By JULIA WERDIGIER
Kirsty Wigglesworth/Associated Press

A takeover would give the London Stock Exchange the same access to an additional income stream that most of its European rivals already enjoy.LONDON — The financial data provider Markit Group said on Tuesday that its bid for the LCH.Clearnet Group failed to receive the necessary support from the clearinghouse, paving the way for a rival offer from the London Stock Exchange.

Markit had teamed up with NYSE Euronext to bid for LCH, the largest independent clearinghouse in Europe. The London Stock Exchange was also in talks with LCH about a transaction; the Nasdaq OMX Group also sought a stake in the company.

.Twitter ..“We see clearing as complementary to our other services, and LCH.Clearnet represented a unique opportunity to acquire an important piece of market infrastructure,” Markit said in a statement. “We unfortunately did not receive the LCH.Clearnet board support required to move ahead and seek shareholder support.”

Markit also said LCH would remain “an important business partner of ours and an important client,” adding that it would “continue to support them and their members by providing them with the products and services they require.”

Reuters reported on Tuesday that the chief of the London Stock Exchange, Xavier Rolet, won the backing of the LCH board for a 1 billion euro ($1.35 billion) takeover, citing an unidentified person familiar with the situation.

Tom Gilbert, a spokesman for the London Stock Exchange, and Andrea Schlaepfer, a spokeswoman for LCH, declined to comment on the takeover bid.

A deal would give the London Stock Exchange the same access to an additional income stream that most of its European rivals already enjoy. Clearinghouses, which sit between the two sides in a trade and temporarily assume the counterparty risk, are also gaining importance as new financial regulations are implemented.