Euronext plans City move to win Exchange

EURONEXT, the Stock Exchange based on the Continent, will announce this week that it is prepared to move its headquarters to the City to clinch a bid for the London Stock Exchange.

It is understood that Euronext, a Dutch incorporated company listed in Paris, is also prepared for a full London listing.

Chief executive Jean-Francois Theodore is expected to outline the deal in a Stock Exchange announcement, but he will not give details of how much he would pay for the LSE.

While the move to London would disappoint the French government, which would prefer Euronext to take over the Italian and Spanish exchanges, it would put Euronext in pole position to win the LSE.

Its rival, the Frankfurt-based Deutsche Borse, has already had a £1.35bn bid rejected and has told its staff that it would not be prepared to move.

The Financial Services Authority said last week that the LSE's parent company should be listed in London. Industry observers said the FSA view spells the beginning of the end of the LSE takeover dream for Werner Seifert, the Borse's pugnacious chief executive.

However, a Deutsche Borse spokesman insisted last night that while its parent company would be in Frankfurt, its equity business would be based in London with a London-appointed board subject to FSA regulations.

'In effect the LSE will remain a UK exchange,' he said.