Euronext won't pay Stock Exchange price

EURONEXT, the pan-European exchange headed by Frenchman Jean-Francois Theodore, will refuse to bid for the London Stock Exchange unless chief executive Clara Furse drops her demand for at least 590p a share.

Shares in the LSE ended last week at 493p, well below the 530p offered by Deutsche Borse, which has now pulled out of the bidding. The price was also significantly short of what Furse insists she wants.

But Furse, whose job and reputation could be on the line if she fails to pull off the sale, is apparently insisting that anything below 590p a share does not value the business fairly.

Sources close to Euronext said the company would prefer to abandon the deal rather than pay over the odds for the LSE. Theodore is under pressure from his shareholders to ensure he does not overpay.

Failure to secure a takeover could put Furse, rated Britain's 97th most powerful woman, on the spot. Some shareholders have not been encouraged by her performance. One told Financial Mail on Sunday: 'She is toast unless she can pull off a good deal.'

Furse has transformed the financial performance of the Exchange, but has not secured a deal that would propel the business into the big league. Notably, she lost out to Theodore in the battle to buy Liffe, the London-based derivatives exchange. If she had secured that deal, the LSE could now be a predator rather than being stalked by larger rivals.

Euronext, which reckons it can make £100m in savings if it buys the LSE, now says that any bid it makes will not be until after the Office of Fair Trading has reported on the takeover, probably at the end of the month.

But even if Theodore walks away, he will have the satisfaction of having seen his rival, Deutsche Borse, forced to drop out of the bidding for the LSE. A Borse victory would have confined Euronext to the role of bit player.