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Deutsche Boerse to Cut LSE Merger Approval Threshold
World Economy

Deutsche Boerse to Cut LSE Merger Approval Threshold

London Stock Exchange Group Plc and Deutsche Boerse are considering lowering the approval threshold they need to achieve from the German exchange’s investors to push their deal through, as they try to keep the merger on track following Britain’s vote to leave the European Union.
Deutsche Boerse said on Sunday it was concerned that the 75% threshold for its shareholders to approve the deal might prove difficult to cross because index funds which hold up to 15% of its shares are unable to accept the offer until the minimum level of acceptances has already been reached, Reuters reported.
The companies said in separate statements that the parties involved were looking at the potential for lowering the minimum acceptance threshold “with a view to enabling index funds to participate in the offer.”
“The fact that Deutsche Boerse is considering lowering the threshold leads us to believe the vote could be much closer than that of LSE’s 99% approval,” Keefe, Bruyette & Woods analysts wrote in a note.
The British company asked its shareholders to back its $27 billion merger with its German counterpart to create a European exchange giant on July 4 at a subdued, short meeting, dismissing concerns it was “shackling itself to a corpse” after the EU referendum result.
Deutsche Boerse was to ask its shareholders to back the deal—the third attempt by the LSE to merge with the German exchange operator in some 16 years—in a postal vote that closes on July 12.
However if the threshold is lowered there will be an extension of the acceptance period for a further two weeks.

 

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