Deutsche Borse boss will sweet talk Clara

DEUTSCHE Borse supremo Werner Siefert will this week spearhead a major German charm offensive aimed at winning control of the London Stock Exchange. He will hold summit talks with LSE bosses Clara Furse and Chris Gibson-Smith over his £1.3bn bid proposal.

Siefert believes he can counter the objections that derailed an earlier agreed merger attempt in 2000.

A well-known Anglophile, he is understood to believe that most of the xenophobic sentiment of four years ago has faded away. He will, however, come under intense pressure to increase his 530p-a-share cash proposal amid widespread expectations that a rival bid will emerge.

Observers say it would be 'very surprising' if pan-European exchange Euronext - which snatched London futures and options market Liffe from under the nose of the LSE three years ago - does not table a proposal of its own. {2}A rival offer from Scandinavia's OMX, which launched a hostile bid four years ago, may also be on the cards. A quarter of the LSE's shares are still in the hands of City stockbrokers.

Siefert believes his commitment to keep the LSE's existing trading currencies, to cut prices for electronic trading and to preserve London as a financial centre will address their concerns.

'A lot of lessons have been learned and Deutsche Borse is very sensitive to the issues,' said one observer. 'Any objections are now only coming from national pride. They are not substantive business reasons.'

Deutsche says its offer is at a 52% premium to the 348p price on October 22, before the latest bout of bid speculation drove the shares upwards.

Regulator the Financial Services Authority is expected to examine the dramatic price rise which occurred in the run-up to the proposal.