Liffe's future lies with Euronext

The board of the London International Financial Futures and Options Exchange (Liffe) has unanimously voted to recommend a £555 million ($806 million) cash takeover bid by pan-European exchange operator Euronext to its shareholders. The other bidders were the London Stock Exchange and Deutsche Borse.

The offer means that each Liffe share is valued at £18.25. When the London derivatives market said it had received takeover bids on September 28, its shares were trading at 860p each.

Under the terms of its proposals, Euronext’s derivatives business would be migrated to the Liffe Connect trading platform, which would be led by Liffe chief executive Hugh Freedberg, who along with Liffe chairman Brian Williamson will gain seats on Euronext's board. Liffe’s management team would also assume responsibility for all of Euronext’s derivatives business.

“This is the right result for Liffe and for London, and we believe it will be welcomed by shareholders and customers alike,” said Freedberg.

Meanwhile, Williamson said: “From its inception, Liffe has always endeavoured to be outward in aspect and international in character. This move continues our strategy to use technology to develop our business. After notable successes in New York and Tokyo, this adds a further dimension in the fast-developing European arena, and is good for all users of derivatives markets.”

Euronext shares in Paris suspended trading this afternoon pending the announcement. Created in September 2000 by the merger of the Amsterdam, Brussels and Paris exchanges, 1,588 companies were listed on Euronext as of June 30 this year. Average monthly trading volumes for the first six months of 2001 on its central electronic order book were €148 billion.